Hi everyone, we hope you’re enjoying your summer so far! As mentioned in our previous post, we’re going to be continuing our end of the month Logistics Glossary Week, where we will be covering logistics terminology that you may or may not be familiar with that has to do with news that’s currently happening today. So let’s get started!
Third Party Logistics Provider
Definition: A 3rd party logistics or 3PL provider is a firm that provides multiple logistics services for use by customers. Usually these services are bundled to offer an integrated service solution. Common services are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding. They can take manage any or all parts of the supply chain process and sometimes they can specialize in particular types of transport (for example alcohol, chemical, or refrigerated goods).
We’ve decided to kick off out Logistics Glossary Week with a definition of what a third party logistics provider actually does because the recent findings from the 24th annual ‘State of Logistics’ report by Penske Logistics. The results suggested that while the logistics industry should be prepared for a ‘new normal’ of slow growth, companies have started to become more reliant on 3PL services due to its potential to cut costs, as well as to have access to a body of supply chain experts who are comfortable and connected within the industry.
Definition: Freight carriers are companies that specialize in providing transportation of goods (i.e. freight) from one place to another, they can sometimes be referred to as ‘for hire’ carriers. Usually these companies own their own equipment and can have any or all of the following transportation services: trucking, rail, airlines, and ships.
This term is also relevant to the ‘State of Logistics’ report. While freight carriers offer different modes of transportation, we’d like to bring the focus on trucking. As you may have heard, the logistics industry is currently having a staffing problem with regards to trucking. Truck drivers were shown to have a fewest potential workers trained to fill the growing demand for them (trucking services rose 2.9%). As stated by the report, about 17% of the current driver population is under the age of 35, while a large proportion of truck drivers are on their way to retirement.
Cross-Border vs. Domestic Shipping
Definition: If you are shipping domestic, it means that your shipment is happening within the same country from origin to destination. Cross-border is the opposite, where packages at origin will have a final destination in a different country from origin.
We want to bring light to this definition because we recently ran into an interesting blog post that talked about a report issued by the World Economic Forum and the Boston Consulting Group on innovations that will change the supply chain. One of the things that are in development is a ‘smart’ visa system for automated check-in, security, and border control. This can potentially reduce the time it takes to cross borders by eliminating long lines at airport screening points and land border crossings while enhancing security. Biometric identity checks can also add to the speeding up of the processing. Furthermore, it has the potential to cut costs due to the fact that the visa applications could be standardized across multiple countries that would provide all relevant data to officials in all participating nations.
We hope you’ve enjoyed our second Logistics Glossary week post and that you have a wonderful long weekend (Happy Canada Day!). To keep up with our posts, and to see other content related to logistics and supply chain don’t hesitate to follow us on Twitter or subscribe to our blog! If you’re interested in what we do as a company, feel free to check out our services. Looking forward to seeing you in July!