What is logistics externalization?

The so-called third-party logistics refers to a logistics management mode in which production and operation enterprises entrust their logistics activities to professional logistics service enterprises through contracts in order to concentrate their main business, and at the same time keep close contact with logistics enterprises through information systems, so as to realize the control of the whole process of logistics management. Therefore, the third party logistics is also called contract logistics. Third-party logistics does not belong to Party A or Party B, but provides its professional logistics services through cooperation with Party A or Party B.. It does not own goods or participate in the sales of goods, but provides customers with serialized, personalized and information-based logistics agency services based on contracts and alliances. The most common third-party logistics services include designing logistics system, EDI function, report management, cargo integration, carrier selection, freight forwarder, customs declaration agent, information management, warehousing, consulting, freight payment and freight negotiation. Classification of legal types of commercial formats of third-party logistics; Nowadays, the third-party logistics enterprises in China logistics industry mainly have two business formats. First, third-party logistics enterprises accept the entrustment of customers and handle related goods according to the requirements put forward by customers. In fact, the business model of this format is essentially a entrusted legal relationship, which belongs to the primary format in the sense of logistics theory. Its manifestation is to handle the affairs of the client, pay a certain fee according to the entrusted matters, and the trustee (logistics enterprise) collects the fee according to the actual cost plus profit and provides corresponding services. If the client fails to fulfill the obligation of informing, thus causing losses to the equipment of the trustee and the equipment and articles of other clients, and the agent has fulfilled the obligation of examination (Article 406 of the Contract Law, Obligations of the Agent), and the agent is exempted from liability, thus causing losses to a third party, the third party shall directly recover from the client at fault. In the actual operation process, it is often adjusted according to the relevant terms of the entrustment contract. For example, in Article 407 of the Contract Law, if the trustee suffers losses due to reasons not attributable to him, he may claim compensation from the principal. Therefore, the primary format of third-party logistics is essentially entrusted legal relationship. At present, China's logistics has just started, so most logistics enterprises are established based on this entrustment relationship. Secondly, another mode is that logistics enterprises look for suppliers, agents and distributors in the name of logistics enterprises according to customer requirements, and at the same time provide customers with corresponding warehousing, transportation, packaging and other services, and design logistics solutions for customers. This model is often a long-term alliance and cooperation between the third-party logistics service enterprises and the end customers by establishing a stable contractual relationship with fixed customers (usually chain enterprises) and a wide range of commodity relations with production in the name of logistics enterprises. This business model is an advanced business model of third-party logistics. In actual activities, according to the characteristics of the activities of third-party logistics enterprises, the author thinks that this is an anonymous agency behavior rather than a disciplinary behavior. Anonymous agency is a concept in Anglo-American legal system, which means that an agent enters into a contract with a third party in his own name within the scope authorized by the principal, and the third party knows the agency relationship between the agent and the principal when entering into the contract. As long as the agent conforms to the interests of the principal, the principal will bear the responsibility. The fundamental difference between it and the trustee-trader is that the trustee-trader can only engage in foreign activities in his own name, so he can't confront the principal when concluding a contract with a third party. In practice, manufacturers, suppliers and other companies have a buyout and agency relationship with third-party logistics enterprises, and third-party logistics enterprises carry out handling, distribution and processing according to the orders of end customers. It can be seen that in this mode, the third party knows that the logistics enterprise is actually the agent of the end customer, but the third party logistics enterprise does not have a relationship with the end customer in its own name, and the responsibility is borne by the end customer. It should be pointed out that in this process, logistics enterprises exceed their authority for their own interests, and their actions are invalid. Moreover, due to the fault of the third party, the third party is directly responsible for the final customer. (Usually, the manufacturer's goods cause losses to the supermarket, and the manufacturer should bear the fault responsibility and compensate the supermarket. The above business activities can show that the advanced commercial format of third-party logistics is actually an anonymous agent's behavior. Third-party logistics and its current market situation The third-party logistics is a service provided by middlemen in the logistics channel. Middlemen provide all or part of the logistics services needed by enterprises in a certain period of time in the form of contracts. Third-party logistics providers are companies that manage, control and provide logistics services to external customers. They do not occupy a place in the product supply chain, but are only the third party, but serve the product supply chain by providing a whole set of logistics activities. The third-party logistics in the modern sense is an industry with a history of about 10 to 15 years. In the United States, the third-party logistics industry is still considered to be in the development period of product life cycle; In Europe, especially in Britain, it is generally believed that the third-party logistics market has reached a certain maturity. At present, the proportion of using third-party logistics services in Europe is about 76%, and that in the United States is about 58%, and its demand is still growing. The research shows that 24% of non-third-party logistics service users in Europe and 33% of non-third-party logistics service users in the United States are actively considering using third-party logistics services; 62% of European third-party logistics service users and 72% of American third-party logistics service users think that they may increase their use of third-party logistics services within three years. Some industry observers estimated the size of the market. The market size of the third-party logistics industry in the United States is equivalent to $420 billion, and the potential logistics market in Europe in the near future is estimated at around $950 billion. It can be seen that the world third-party logistics market has a special certificate of great potential, gradual progress and high growth rate. This situation makes the third-party logistics industry have a large number of service providers. Third-party logistics service companies are mostly developed from traditional "internal logistics" industries, such as warehousing, transportation, air transportation, shipping, freight forwarding and logistics departments in enterprises. They have succeeded in providing various services according to the different needs of customers. At present, there are hundreds of third-party logistics providers in the United States, most of which are not third-party logistics service companies at first, but gradually develop into industries. The service content of third-party logistics is mostly concentrated in the traditional transportation and warehousing fields. Storage and transportation enterprises have a deep understanding of these services and have certain experience in each individual service. The key is how to organically combine these individual service contents to provide the overall scheme of logistics and transportation. In the practice of third-party logistics in western developed countries, the following points are worth noting: First, the scope of logistics business is expanding. In the face of increasingly fierce competition, commercial organizations and major companies have to focus on their core business, leaving transportation, warehousing and other related business links to more professional logistics enterprises to operate in order to save and be efficient; On the other hand, in order to improve service quality, logistics enterprises continue to expand their business scope and provide supporting services; Secondly, many successful logistics enterprises analyze their own operating costs and agency fees according to the negotiation terms between Party A and Party B, and flexibly use self-care and agency to provide customized logistics services; Third, the logistics industry has great development potential and broad development prospects. The rapid development of logistics industry after World War II is determined by the development level of social productive forces. After World War II, the internal production level of enterprises has further declined, and with the optimization of "zero inventory" between production and distribution, it means that the stocking time of raw materials and parts will be greatly reduced. At the same time, the rapid development of global economic integration and the formation of emerging markets force enterprises to adopt global strategies to find their production resources, and more and more products are sold around the world as global products. These demands constitute the source power of logistics development, among which the reduction of internal production level of enterprises is the main reason. At the same time, in order to participate in world competition, enterprises must reduce product costs (including production costs and sales costs), reduce inventory (including inventory during storage and transportation), and improve efficiency; Enterprises need accurate and timely information and increase the visibility of key supply processes. Third-party logistics providers have solved the above problems for enterprises, so more and more enterprises choose to send logistics services abroad. How does the third party logistics create value? Third-party logistics creates profit source. The driving force of the development of third-party logistics is to create profits for customers and themselves. Third-party logistics companies must meet customers' needs with attractive services, and the service level must meet customers' expectations. In order for customers to make profits in logistics, they should also make profits themselves. Therefore, third-party logistics companies must create profits through efficient logistics operation, informationization of logistics management, modernization of logistics facilities, specialization of logistics operation and scale of logistics volume. (1) Operating income: Third-party logistics services can first provide customers with the benefits of "logistics operation" improvement. On the one hand, third-party logistics companies can provide logistics services or production factors that customers cannot provide themselves through third-party logistics services, which is an important reason for the emergence and development of logistics outsourcing. In the case that enterprises organize their own logistics activities, or are limited to the professional knowledge or their own technical conditions, it is difficult for enterprises to meet the needs of their own logistics activities, and it is often uneconomical for enterprises to improve or solve this problem by themselves. Another improvement of logistics operation is to improve the operation performance of enterprise internal management, increase the flexibility of operation, improve the consistency of quality and service, speed and service, and make logistics operation more efficient. (2) Economic benefits: Third-party logistics services provide customers with economic or financial benefits, which is the basis for the existence of third-party logistics services. Generally speaking, low cost is created by low-cost factors and economies of scale, including the cost of labor factors. Through logistics outsourcing, we can change the cost from no cost to variable cost, avoid blind investment, divert funds for other purposes and reduce costs. Stable and visible costs are also positive factors affecting logistics outsourcing. When stabilizing costs, planning and budgeting procedures are simpler. Generally speaking, it is difficult to clearly distinguish the cost of one link from the cost of other links, but through logistics outsourcing and the use of third-party logistics services, suppliers must explain the costs and expenses, and the clarity of costs will increase. (3) Management benefits: Third-party logistics services will not only improve operations and reduce costs, but also bring management-related benefits to customers. As mentioned above, logistics outsourcing can make use of management expertise that enterprises do not have, and can also use internal management resources for other more profitable purposes, which is consistent with the core strategy of enterprises. Logistics outsourcing can make the company's human resources more focused on the company's core activities, while gaining the core business capabilities of other companies (third-party logistics companies). In addition, the benefits of a single resource and the reduction of the number of suppliers are also potential reasons for logistics outsourcing. A single resource reduces the expenditure of public relations and reduces the pressure on the company to coordinate among several transportation, handling and warehousing service providers. Third-party logistics services can bring many management benefits to customers, such as: information management of orders, avoiding work interruption, collaborative operation and so on. (4) Strategic benefits: Logistics outsourcing can also produce strategic significance and flexibility. Including the flexibility of geographical blockade (setting or canceling) and the flexibility of adjustment according to environmental changes. Focusing on the main business is equally important at the management level and the strategic level. * * * The income from taking risks can also be obtained through third-party logistics services. The operational value of third-party logistics The challenge faced by third-party logistics service providers is to provide higher value than customers' own logistics operations. They should not only consider the competition of similar service providers, but also look at the internal operation of potential customers. Third-party logistics providers generally need to create operational value from three aspects: improving logistics operation efficiency, integrating with customer operation and developing customer operation. (1) Improving the operational efficiency of logistics means developing each individual activity (such as transportation and storage) that eventually forms logistics. For example, the operational efficiency of warehousing depends on adequate facilities and skilled operation skills. Another more advanced role within the scope of operational efficiency is to coordinate continuous logistics activities. In addition to operational skills, coordination and communication skills are also needed. The ability of coordination and communication is largely related to information technology, and a person's coordination and communication is generally realized through the tool of information technology. If there are favorable cost factors and the company focuses on logistics, it is very likely to provide better services at lower cost. (2) Another way to increase value by integrating customer operations and third-party logistics services is to introduce multi-customer operations or share resources among customers. For example, a multi-customer integrated warehousing and transportation network can make use of similar combined resources, and the scale benefit of integrated operation becomes an important aspect to improve efficiency. The integrated operation of third-party logistics is very complicated, which requires more information technology and skills. This comprehensive value-added method is also suitable for uneconomical transportation and storage networks operated by a single customer. Therefore, economies of scale are increasing, and if it works well, it will bring competitive advantage and a larger customer base. Of course, some large customers with large cargo flows often invest in coordination and communication skills and their assets to integrate the company's logistics resources on their own. (3) Horizontal or vertical integration The above discussion mainly focuses on the efficiency improvement brought by the internal operation outsourcing of third-party logistics customers. In fact, from the perspective of third-party logistics service providers, it is also necessary to integrate resources and outsource business. For the third-party logistics service providers without assets, it is mainly to manage external resources. The skills that such companies create value for customers are powerful skills such as information technology, logistics plan management and implementation. Through vertical integration, they can purchase single logistics function operation or resources with cost and service advantages, and develop relationships with single logistics function providers, which is also a way to create value. In this way, logistics suppliers can focus on their new capabilities. In the horizontal direction, if the third-party logistics companies can unite similar but non-competitive companies, they can jointly serve customers and expand the geographical coverage of providing services to customers. (4) Developing customers, operating third-party logistics companies and creating value for customers is another way to gain value by developing customer companies and organizing operations. This third-party logistics service is basically close to the work done by traditional logistics consulting companies, but the difference is that the solutions proposed at this time should be developed by logistics suppliers themselves. The driving force in value-added activities lies in customers' own business processes, and value-added can be regarded as the willingness to manage and integrate the supply chain. The cost value of third-party logistics in the fierce competition market, reducing costs and improving profit margins are often the first choice goals pursued by enterprises. This is also the reason why the cost value of logistics was excavated as the "third profit source" after the oil crisis in the 1970s. Logistics cost is usually considered as one of the higher costs in enterprise operation. Controlling logistics cost is equivalent to controlling total cost. The complete logistics cost of an enterprise should include the investment, warehousing, transportation and distribution of fixed assets such as logistics facilities and equipment (that is, the logistics cost in a narrow sense), as well as the management fees and labor costs required for the management and logistics activities of the municipality directly under the Central Government, and the accompanying information transmission and processing costs in a broad sense.