Council of Logistics Management (CLM) defines logistics as “the process of planning, implementing, and controlling the efficient effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements” with the main aim of providing reliable services (ESRI, 2009). It can therefore be said that it is the science of moving materials or goods within, from, and/or to a production facility. Its main goals entail fast response to the customers’ needs, consistency in service provision, minimum inventory, reducing transport costs, quality services, and life cycle support, i.e. ability of a firm to deliver the goods as well as return them in case of a detected defects or a need for repackaging (Deepen, 2009, p. 39).
Due to its complexity, logistics requires managers to act more practically as the process involves mostly practical field experience. However, many firms are unable to provide the logistics services by themselves, and instead they seek for outsourced services from some of the logistics companies who are specialized in these services. Some of the services offered by these registered logistics companies are like freight forwarding, export management, export packing, container leasing, goods surveying, warehousing, distribution, etc (Sanyal, 2001, p. 31). Most of these companies are generally referred to as Third Party Logistics companies (3PL). Their services entail either complementing or wholly replacing the overall internal logistics activities of another firm by offering effective services so that the firms could save their operation costs.
It has been observed that there is dramatic surge in the number of logistics companies and the use of their services in the last two decades. According to a recent study conducted by Deepen (2009), companies in Western Europe alone turned out to use 64% of their total expenditure on logistics outsourcing, while those in United States used 48% on logistics expenditure (Deepen, 2009, p. 21). Moreover, the 2009- 2011 growth rate of these figures has been projected to reach 17%. Again, the usage of the logistics outsourcing services has also increased from 40% of Fortune 500 companies in 1990 to 80% in 2004 (Deepen, 2009, p. 4 ).
Logistics Service Providers have increased in numbers, with most of them specializing in certain areas like parcel delivery, while a few doing almost virtually all areas of the logistics issues. Such companies include USF Logistics Services Inc, Menlo Logistics Inca, DB Schenker, and UPS among many others.
USF Logistics Services Inc.
USF Logistics Services Inc. is a transport industry leader with the annual revenue of $2.29 billion. It specializes in the comprehensive delivery and finding out solutions for the management of supply chains, which entails high prices for next-day delivery, clearing and forwarding in combination with high quality local and nationwide transportation and truck loading. The company’s operations are concentrated in the USA, Canada, and Mexico. Its interaction as a single system to provide services and “flexibility to match the needs of their customers has been attributed as the basis of its success that saw it awarded an ISO 9001: 2000 certification in 2003 for its excellent services in transportation management, and ocean services operations” (Wagner, 2008, p. 21).
Menlo Logistics Inc.
Menlo Logistics Inc. is a contract logistics provider that operates a full-service basis all over the world. Founded in 1990, the company applies an “advanced management systems to cost-effectively integrate and simplify complex logistics operations” (Sanyal, 2001, p. 31) that include transport, storage, distribution, and shipment tracking for its customers. With reputable customers like IBM, Imation, Nike, Sears, Coca-cola, Dow Chemical, and Frigidaire, Menlo has proved its worth with timely and cost effective services to its clients. Its services and ability to collaborate with other technology companies like NCR, a leading provider of information technology solutions, got them ISO 9001/9002 certification in 1998 (Sanyal, 2001, p. 33).
DB Schenker Inc.
DB Schenker Inc. is a logistics company which was the first fully fledged logistics company to achieve an ISO certification in 1993. It operates all over the world boasting of a broad locations network reaching to 200 branches. With services ranging from “full line transportation and supply chain” to a range of logistics and transport services, the company offers the customers a wide variety of options (Deepen, 2009, p. 199). Basing their business model in the concept of “customer satisfaction and customer delight” (Deepen, 2009, p. 199), they are able to facilitate their performance and the idea of delight which is believed to reinforce more customer loyalty. Still, the ability of a company to provide an unexpected activity to its customers is viewed as the source of success of the company because it, as any other company wishing to outsource its services, always looks for the best offers that would meet the requirement of its customers (Goldsby et al., 2001, p. 189).
UPS, a company specializing in freight forwarding worldwide, is credited with the ability to handle all the “logistical aspects of a transaction” (Sanyal, 2001, p. 314). They have worked with several companies that deal in transport business to reinforce their services that involve handling different firms’ international supply and distribution activities (Sanyal, 2001, p. 314). They are able to handle documentation issues and negotiate cost of shipping or transportation in general. UPS has developed a wide logistics network all over the world with its presence in almost every continent, helping many retail supply chains like Wal-Mart. They have also improved their services through the use of technology, enterprise resource planning, and computer software that provides the informational base to deal with the current complicated business issues (Sanyal, 2001, p. 314).
Drawing from the aforesaid, it is evident that the companies researched present quality services, some to a higher extent, and others to a lower. For example, USF Logistics Services Inc. proves this by the high revenue levels and the wide, multinational, network of logistics locations. Menlo Logistics Inc. provides a huge variety of services and possesses a wide network of partnership relations with the American and European business giants. DB Schenker Inc. achieves the goals of high-quality services through the development of the organizational culture aimed at providing their customers with the best services possible. Finally, UPS proves the high quality of its services through the cooperation with business partners all over the world and with the retailers to find its customers in the retail market as well.
These are the concepts in which the International Organization of Standardization (ISO), a network of national institutes of standardizations with over 140 countries membership, was developed to oversee and certify the product services and goods that meet set international standard. ISO 9001:2000 has consequently been referenced when measuring the quality requirements in transactions of business-to-business type. With these overall certifications, the clients can therefore get assurance of the expected services and outcome. With this concept, the Logistics companies including USF Logistics Services Inc, UPS, DB Schenker and Menlo Logistics have prospered hence the confidence created among their loyal customers.
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Deepen, John. A comparison of Actual and Intended Consumer Behavior in Response to Retail Stocks-outs, New York; Princeton, 2009.
ESRI. “Coming to Terms with Transportation.” The Geographic Advantage. 1999. Arc User. Web.
Goldsby, Deepen M., Knemeyer, Thomas J & Michael A. Wallenburg. “Beyond Expectations: An Examination of Logistics Outsourcing Goal Achievement and Goal Exceedance”. 2001. Journal of Business Logistics. Web.
Sanyal, Rajib N. International Management: A Strategic Perspective. Boston: Prentice Hall, 2001.
Wagner, Steven M. “Innovation Management in the German Transportation Industry.” 2008. Journal of Business Logistics. Web.