Logistics services in supply chain strategies
Contracting logistics services has increased in demand as companies move their production plants closer to destination markets, according to Radiant Logistics.
In the United States, the logistics industry is highly fragmented, with thousands of companies of varying sizes competing in domestic and international markets.
As business requirements for efficient and cost-effective logistics services have increased, so has the importance and complexity of effectively managing freight transportation.
Consequently, Radiant Logistics concludes that companies are increasingly striving to minimize inventory levels, conduct manufacturing and assembly operations in the lowest cost locations, and distribute their products to numerous global markets.
As such, companies are increasingly turning to third-party logistics providers to help them execute their supply chain strategies.
Shippers typically manage their supply chains using some combination of asset-based and non-asset-based service providers.
Radiant Logistics operates primarily as a non-asset-based third-party logistics provider focused on freight forwarding, truck brokerage and intermodal transportation services, along with associated value-added services.
Logistics Services
According to Statista, the third-party logistics services market in the United States and Canada is estimated at approximately $309.2 billion annually.
Because non-asset-based companies select from a variety of transportation options to route customer shipments, they can often serve customers less expensively and with greater flexibility than their asset-based competitors, who generally focus on maximizing the utilization of their own captive fleets of trucks, planes and ships rather than specific customer needs.
Radiant Logistics believes there are several factors that are increasing the demand for global logistics solutions.
These factors include:
- Outsourcing of complementary activities.
- Globalization of trade.
- Increased need for time-definite delivery.
- Consolidation of global logistics providers.
- Growing influence of e-commerce and the Interne.
