If you work in any kind of capacity where logistics play a role, you will have the option of dealing with them yourself or involving third party providers. Third party logistics – often abbreviated as TPL – is a term used to describe any part of the supply chain process which is outsourced to external providers.

These days, this option is fast becoming the primary and often exclusive go to for the vast majority of businesses. But at the same time, TPL will always come with certain advantages and disadvantages that must be taken into consideration. Exactly which third party logistics service you choose to work with will of course make a big difference. Nevertheless, whether or not the idea will benefit your business as a whole is something that must be evaluated, before a final decision is made.

The Pros of Third Party Logistics

In terms of benefits, there are certain undeniable advantages that come with outsourcing logistics, which include the following:

• Convenience. It’s worth remembering that as logistics can be particularly labour intensive and time consuming, the moment you put such responsibilities in the hands of a third party, you free up invaluable time for you and your workforce to focus on more important core business duties.
• Professionalism. Another huge benefits of working with third parties is the way in which this is what they do and all they do on a 24/7 basis. Even if you yourself have at least some experience in logistics, this cannot be compared with the experience and expertise of those who only work in logistics and nothing else. In terms of professionalism therefore, quality of service provided will almost always be improved by outsourcing.
• Costs. In most instances, outsourcing to third party service providers can bring logistics costs down to absolute minimums. This is especially true in the case of new business startups, which may otherwise be looking at a pretty sizeable initial outlay for the required equipment, storage facility, vehicles and so on.

Cons of Third Party Logistics

As for the downsides of outsourcing logistics, there are certainly a few disadvantages to consider which include the following:

• Costs. While it may be true to say that third party logistics services can in some instances reduce costs, they also have the potential to be expensive in others. It all depends on your current circumstances, the equipment you have access to and your exact requirements.
• Control. Another disadvantage is the way in which you will to some extent relinquish control of both your goods and the key link in your end to end supply chain. Of course, this is not to say that a high quality service provider cannot do the job even better than you personally, but giving up control in such a manner can be a daunting prospect.
• Failure. And of course, there is always the risk of finding yourself contractually bound to a service provider that fails in its obligations, ultimately having a knock on effect on your brand’s performance, profitability and reputation.

If the decision has been made to outsource to third party service providers, it is of the utmost importance to carry out plenty of research beforehand, seeking recommendations and verification where available.