Logistics Service Provider

Logistics service provider is a company performing logistics activities on behalf1 of a manufacturer or distributor. Depending on the complexity and the type of value-added operations carried out by the Logistics Service Provider, such categories can be defined:

The traditional logistics service providers carry out physical logistics operations (order processing and picking, transport and storage) and whose management system is limited to tracking shipments on behalf of the client company;

Value added service providers add a certain number of services to the traditional package ranging from managing complex operational handling (co-manufacturing and co-packing), to management of administrative operations (billing and ordering) and information management (tracking-tracing, etc.)

These two categories refer to Third Party Logistics (3PL). The manufactures use outside sources attracting outside specialist suppliers of transport or distribution/logistics services, usually under contract (e.g. transport/ warehousing or full-scale logistics service) replacing in-house facilities.

Benefits of Outsourcing:

· Improve company focus

· Access to world-class capabilities and new technology

· Accelerated reengineering benefits

· Share (pool) risks

· Free-up resources

· Cash infusion

· Reduce and control operating costs

· Resources not available internally

· Eliminate labor problems

Challenges of 3PL are:

· Development of appropriate and sustainable pricing systems

· Finding qualified people

· Development of systems which are flexible, adoptable and user-friendly

· Development of a global logistics infrastructure.

The third category: Logistics services integrators characterized by the quasi-absence of their own physical facilities. Their role is to integrate the services of different subcontracting companies (transport, storage, value-added operations, etc.) and to coordinate and control them through management of the associated information flows.

Whereas a third party logistics (3PL) service provider targets a function, a 4PL targets management of the entire process. Some have described a 4PL as a general contractor who manages other 3PLs, truckers, forwarders, custom house agents and others, essentially taking responsibility of a complete process for the customer. The concept 4PL provider was first defined by Andersen Consulting (Now Accenture).

2. Give English equivalents for the words and phrases given below. Make up your own sentences with these words and phrases:

вливание капитала; восполнение; выписывание счетов; запись заказов; физические логистические операции; мнимое отсутствие; облегчать; розничный торговец; сторона-подрядчик; совместное производство и упаковка; склад; субподрядная организация.

7. Complete sentences using words and expressions given below:

managing; ordering; shipments; type; operating; contractors; third; co-manufacturing; sharing; problems; forwarding; value-added; service

1. Depending on the complexity and the ………..….¹ of ……………….² operations there are several categories of the logistics service provider.

2. The management system of the traditional logistics …………. ³ providers is limited to tracking ……………… ⁴ on behalf of the client company;

3. ……………⁵ party logistics providers offer value added services for their customers: ……………………... ⁶ and co-packing, billing and…………….⁷, tracking-tracing, etc.

4. Among the benefits of outsourcing one can mention ……………8 risks, controlling ………………..⁹ costs, eliminating labor ………………¹⁰, accessing new technologies and others.

5. The services of 4 PL providers include ……………¹¹ 3 PL providers, custom house agents, ……………¹², as well as a range of value-added services.

6. Fourth party logistics providers are general ……………….¹³.

8. Answer the questions:

1. What categories of logistics service providers can be defined?

2. What operations do the traditional logistics service providers carry out?

3. What services do value-added logistics service providers add to the traditional package?

4. Logistics service providers of what type refer to 3 PL?

5. What is the role of logistics services integrators? What does the “quasi-absence of their physical facilities” mean?

6. What are the benefits of outsourcing?

7. What kind of challenges of 3PL can you name?

8. What is the concept of 4PL?

9. Translate the sentences using the text “Logistics Service

Provider”:

1. Существуют компании, которые выполняют только такие логистические операции как транспортировка и хранение.

2. Некоторые компании к традиционному пакету логистических услуг добавляют дополнительные услуги с добавленной стоимостью: выписывание счетов и составление заказов, отслеживание и контроль.

3. Когда полный комплекс услуг по логистике от доставки и адресного хранения до управления заказами и отслеживания движения товаров передается на сторону сторонней организации, это называется «третья сторона в логистике».

4. «Третья сторона в логистике», - это, как правило, комплексный логистический посредник для промышленной или торговой компании.

5. «Общие подрядчики» - это компании, которые интегрируют услуги различных подрядных организаций, координируют посредством управления связанные с ними информационные потоки.

6. 4PL провайдер является интегратором всей логистической цепи предприятия.

10. Translate the text and give its main idea in English: