Definition of Logistics Service Provider (LSP)
Logistics Service Providers, or 3PL (third-party logistics) providers, are outsource entities shippers leverage to manage a company's warehousing, distribution and transportation of freight.
While comparable to freight brokers, because of they run under the same type of FMCSA operating authority, LSPs have a higher level tools, technology, knowledge and services than that of a freight broker.
LSPs have a “big picture” strategy with using its top tier transportation management software (TMS) and BI (business intelligence) to maximize its people, technology, processes and knowledge of the industry for more complex shipping solutions.
Many shippers start with the idea of integrating an 3PL logistics service provider because of cost savings, but quickly realize there are many other benefits.
Benefits of outsourcing including:
- Access to Top TMS Technology Solutions
- Reduction of Back-Office Work
- Increased Cost Savings and Efficiencies
- Ability to Leverage the LSP Carrier Network
- Increased Customer Service Satisfaction
- Improved Risk Management
- Ability to Easily Scale the Business
- Quickly Drive a Top Logistics Solution for a Competitive Advantage
- Access to Top Talent and Knowledge Exerts
- Improved Order-to-Cash Cycle and ROI
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