What is 'Contract Logistics'

Contract logistics is the outsourcing of resource management tasks to a third-party company. Contract logistics companies handle activities such as designing and planning supply chains, designing facilities, warehousing, transporting and distributing goods, processing orders and collecting payments, managing inventory and even providing certain aspects of customer service. Examples of major contracts logistics companies include United Parcel Service, Kuehne + Nagel, Exel, Genco and DHL.

BREAKING DOWN 'Contract Logistics'

Logistics management is an important component of many companies' profitability and overall success. While some companies manage their logistics, others find it more efficient to hire specialized contract logistics companies to manage their logistics for them. Contract logistics companies often need to develop a deep understanding of how different industries work to best manage the logistics of a variety of companies.

For businesses operating on an international level, logistics management is an essential element of creating a sustainable competitive advantage.

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