3 types of logistics services
There are three types of logistics services
1. Freight forwarding service: This includes only a single service -freight forwarding
2. Value-added logistics services: They consist of service elements relating to order processing, customer-specific label printing, fleet management, letter-of-credit compliance and negotiation, and warehousing and inventory management.
3. Technology-enabled logistics services: They are concerned with service elements such as information management, tracking and tracing of shipments, Web-based linkage, receiving/sending shipment notices, and receiving/sending
advanced shipping notices through EDI.
On the basis of the above-mentioned three logistics service categories, they classified logistics service providers into four general types
1. Traditional freight forwarders: They only focus on operations efficiency in freight consolidation services. Example: taking a number of small shipments and combine them into a single larger shipment. They position themselves as a “cost leader” in freight forwarding by offering lower rates than customers can obtain from the transport carriers directly.
2. Transformers: They are firms that have expanded their service scope to offer value-added logistics services and technology-enabled logistics services. In addition to the services provided by traditional freight forwarders, they add
value by sharing resources among customers.
3. Niches: They target niche markets and are specialized in value-added logistics services and technology-enabled logistics services. They complement full-service providers by undertaking outsourced logistics activities where they
have a comparative advantage.
4. Full-service providers: They position themselves as a “service leader” by leveraging their service capability to create superior service performance. In addition to operational efficiency, the logistics services offered by them are wide-ranging in scope. Examples of these 3PL service providers include Maersk Logistics and NYK Logistics.
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