Logistics companies provide logistical solutions for organizations. In the manufacturing industry, this usually includes warehousing, transportation, and distribution. Manufacturers need to concentrate on their core business and therefore outsource other functions to logistical companies. These companies work on a contractual basis and are called third party logistics provider.
Logistics companies are generally asset-based and operate a large fleet of delivery vans, trucks, ships, and cargo planes. Many third party logistics companies operate in the United States today. Their basic function is to transfer goods from point A to point B in the most efficient way. These companies specialize in providing logistical support to clients and regularly upgrade their equipment based on available technology. Some of these companies operate a large fleet of aircraft, in some cases, even more than commercial airlines. These companies also operate large automated warehouses to store goods during transportation and distribution.
There are also fourth party logistics providers who only use computer systems and intellectual capital. These companies design and implement all the logistics needed by an organization.
Logistical companies improve the operational efficiency of organizations by allowing fast movement of goods and services. Both, third and fourth party logistics providers work closely and share critical information, in order to constantly improve the existing system of logistics. Data is collected from every component in the supply chain. This data is then analyzed and changes are made, if necessary, to ensure the smooth flow of goods.
The number of companies providing logistical support has grown over the years. Due to stiff competition, companies are turning to logistics companies for help. Automated systems used in supply chain management have helped in saving time and reduces the danger of damage to goods. Today almost all organizations big or small depend on these logistics providers for their operational needs.