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Logistics is the process of planning, implementing and
controlling the efficient flow and storage and
goods, service and reliable information from the
point of origin to the point of consumption for
the purpose of conforming to customer
requirements.
What is Third-Party Logistics?
Third-party logistics (3PL) originated with the
United States Military, which developed the
first logistics systems for managing and
deploying large volumes of supplies and troops.
During the middle and later 1990s, private
companies discovered the benefits of hiring
outside, or third-party, logistics experts to
manage the total flow of products from raw
materials to finished goods. Recognizing the
value of strategic business counsel, companies
utilizing third-party logistics providers have
become more efficient, competitive and focused
on their core competencies.
Logistics . . . An Enormous Industry
- The cost of logistics in the United
States was $1.183 trillion in 2005; 9.5% of
the gross domestic product or “GDP”.
(Source: Council of Supply Chain Management
Professionals 2005 Annual State of Logistics
Report)
- U.S. expenditures on logistics are
larger than the national GDP of all but 12
countries.
- U.S. transportation costs alone, $744
billion, are larger than the GDPs of all but
16 countries.
- The transportation-related workforce
totals 11.3 million people (8.6% of the
total U.S. labor force). (Source: Untied
States Department of Labor).
- 4.36 trillion ton-miles of freight were
moved in the U.S. in 2003, the equivalent of
shipping the Statue of Liberty around the
world 1,164,528 times.
- Big three auto producer Daimler/Chrysler
receives 3,500 truckload shipments per day.
Logistics . . . An Efficient Industry
- In 1980, logistics represented 17.9% of
U.S. GDP. Today, it is 9.5%. This clearly
demonstrates the efficiency of US logistics.
- By comparison, estimated logistics costs
represent 22.3% of China's GDP and 17% of
India's.
- It is estimated that the total logistics
costs associated with delivering a $3.60 box
of cereal from the field to the consumer's
table is about $0.37 in the US. The net
retail profit is about $0.05.
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© 2003-2010 AB Transport, Inc. AB Expedited, LLC All rights reserved.
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