The role of a company that offers third party logistic services is to provide shipment and transportation of goods from one point to another on behalf of another organization. For small and medium sized companies to remain viable within the competitive market, they need third party logistic providers (3PLs) to run their supply management needs ( Töbelmann, 2011). The role of these companies is to provide a better option for small and medium sized businesses to achieve supply chain management goals in an effective and affordable manner.
There are a number of advantages that a business can benefit from while using third party logistic companies. 3PLs employ innovative technology to executive their functions proficiently and effectively. Using the state of the art facilities, including equipment and technology, these logistic companies can easily meet the needs of their customers at any given time ( Töbelmann, 2011). They also have enough warehousing facilities for temporary storage of goods, something that would be costly to individual businesses. Furthermore, using their flexibility and available resources, third party logistics can help businesses to meet their customer’s demands at different locations. The use of third party logistic companies allows the business owners to hold particular people responsible for shipment and transportation of their goods ( Töbelmann, 2011). More so, third party logistic companies give a comprehensive solution, which includes and not limited to country consolidation and freight management services. They also provide other services such as team trucking, insurance as well as handing out claims (Smith, 1998).
However, there are disadvantages that are associated with the use of 3PLs. Firstly, if the company does not manage its services properly, it can greatly affect the reputation of the business among its customers and clients (Smith, 1998). Additionally, a business might lose some grip on its clients to the 3PL provider during the entire shipment process.