Importance if Third Party Logistics Essay

1860 Words 8 Pages
Executive Summary
The performance of the logistics system has a major impact on cost structures, revenues, service quality, and competitiveness in Australian industry. Logistics activities have been evolving rapidly in response to changes such as globalization, general industry restructuring, new production processes, and technological advances.

Many firms, government agencies and joint industry/government bodies are developing programs to improve logistics performance in Australia. The initiatives include the Freight Transport Logistics Industry Action Agenda.

This report develops a broad framework for analyzing logistics activities in Australia. This report will also look at the importance of Third Party Logistics to the
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transport, storage), which date back to the earliest forms of organised trade (Lambert et. al. 1998, p. 5). The term was initially developed in the context of military activities in the late 18th and early 19th centuries. A key element of logistics, the trade-off between transport and inventory costs, was formally recognised in economics at least as early as the mid 1880s (Langley 1992, pp. 19-20).

Definition
The concept of logistics has evolved over time in response to factors such as changes in the business environment. Grunnet (1996, p.32) notes that the focus was inventories in the 1950s, distribution in the 1960s, production in the 1970s, purchasing/production/sales in the 1980s, and business process in the 1990s. Logistics can be defined as that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customer’s requirements.

There are many different types of logistics service providers (LSP’s). Prime Assed Provider, Third Party Logistics Provider or Outsourcing (3PL), Lead Logistics Provider (LLP), Fourth Party Logistics Provider (4PL), Joint Service Company (JCS) and Virtual Network Consortium are some of the key types of LSP’s.

Out of these types of LSP’s, Third Party Logistics or Logistics Outsourcing is the most important and becoming most popular amongst the businesses in