Contract logistics is a long-term business model in the logistics industry. The logistics and system service providers offer their customers a cooperation covering a wide range of logistics tasks. Contracts within contract logistics are not only characterized by a longer term but also by a considerable sales value.
Definition / explanation
Contract logisticians (similar to system service providers) develop extensive logistics networks for their customers (mostly manufacturers or traders of goods) along their value chain, for which they integrate their own and external resources.
It is characteristic of contract logistics that no individual orders are awarded, but rather manufacturing companies, for example, transfer their entire sales logistics to the service provider (contract). System service providers in contract logistics are often able to adapt to the special needs of an industry and to implement such a network together with the customer.
Due to the longer running times (at least one year) and the high sales volume (at least one million euros), both sides have the security and planning ability to develop stable and therefore successful processes.
The integration of contract logistics in the company can be an advantage, as this saves capacities (vehicle fleet or IT) and does not have to worry about handling the logistical processes (labor-intensive, especially for international business). With this business model, the system service provider bears full responsibility for performance, quality and costs.