CONTRACT LOGISTICS - OUTSOURCING AND FULFILMENT LOGISTICS
What does contract logistics mean?
Contract logistics is a component of supply chain management and means that there is a contract-based (contract = agreement), long-term cooperation between a producer or trader and a logistics service provider. The services provided within the framework of contract logistics are characterised by a high degree of complexity and go beyond transport, handling and storage. By outsourcing logistics processes, customers benefit from reliability and services from a single source that add value to the value chain.
The service package is individually adapted to the customer’s needs and can be flexibly combined. The contract logistics service provider thus becomes an indispensable cooperation partner.
3PL vs. 4PL
A distinction is often made between 3PLs (third party logistics providers) and 4PLs (fourth party logistics providers). Contract logistics providers usually have their own assets (warehouses, logistics real estate, materials handling equipment, personnel and vehicle fleet) and thus belong to the 3PLs. 4PLs have a purely advisory and controlling function and do not have their own logistics assets.
Advantages and disadvantages of contract logistics
Outsourcing logistics processes to a professional can make a lot of sense and add value. Depending on the industry, project and product, working with a contract logistics provider offers various advantages. These include:
- Years or decades of logistics expertise with customers from various industries. This gives us a deep understanding of the individual problems and requirements of our customers.
- Significant savings in logistics costs can be achieved by outsourcing to a contract logistics company. In addition, the customer does not need its own warehouse or transport fleet, which means that significantly less capital is tied up.
- Optimal utilisation of capacities even during fluctuations and seasonal order peaks
- Use of innovative technologies that increase efficiency, relieve employees and generate data in real time
- The customer can concentrate on his core competence – the product
- Transparency about costs
- Contribution to the client’s sustainability strategy
There are no real disadvantages to working with a contract logistics provider. However, outsourcing logistics is only really worthwhile from a certain volume and over a longer contract term.
Examples of contract logistics
There are many examples of outsourcing logistics on a contract basis. Logistics services are aimed in particular at companies that:
- want to assemble, store and transport large quantities of orders/orders;
- must ensure compliance with standards and certificates for storage and transport (fresh food logistics, organic certification);
- belong to the e-commerce, FMCG (Fast Moving Consumer Goods), pharmaceutical, chemical, automotive and food sectors;
- want to outsource their logistics in the long term in order to save costs and operate more efficiently and sustainably.
Rethinking contract logistics
E-commerce fulfillment, logistics outsourcing, multi-user logistics real estate, sustainability, digitalization – there are many fields of action that influence contract logistics. At pfenning logistics, we pick up on current technology and market trends, develop them further and integrate them into our contract logistics portfolio. For example, we can offer efficient, IT-supported returns handling for (Internet) retailers as well as manufacturers.
Our multi-user logistics sub-centers, the “multicubes,” enable shared use of warehouse, transport and IT infrastructures under one roof – facility sharing that saves costs. We consistently implement sustainability in logistics – whether with rooftop solar power plants or low-emission trucks, cars, and even zero-emission industrial trucks. We digitize and virtualize logistics processes and also make them tangible for our customers with the help of augmented reality, for example digital warehouse management or process observation. At pfenning logistics, we focus on innovation – because technological standstill is contract logistics regression!
Benefit from pfenning logistics as a contract logistics provider
The continuous quality of our contract logistics services is our top priority. That’s why we regularly have various areas of our service portfolio certified and also repeatedly achieve top industry awards. Benefit from 125 years of experience and logistics know-how.
Unser Serviceportfolio umfasst:
- Contract logistics
- Warehouse logistics
- Transport logistics
- E-commerce logistics
- Fulfillment logistics
- Returns handling
- Logistics for SMEs
- Supply chain optimisation
Third Party Logistics - Simple solutions for complex processes
Numerous customers rely on our effective logistics processes every day. An excellent network structure ensures reliability, as we are already building on 125 years of experience as a third party logistics (3PL) service provider. As an established contract logistics provider, we already enjoy the trust of countless long-standing customers. Because we ensure that our customers’ goods management cycles are and remain stable, that contracts can be fulfilled and that our clients are satisfied. Because reliability counts for every company and especially for contract logistics service providers.
Sustainable contract logistics is in every detail
Customers and consumers are placing more and more value on ecological logistics – and so is pfenning logistics. Whether car parts, raw materials, chemicals, pharmaceutical products, consumer goods, hygiene products or food – whether non-food or food – in our sustainability-awarded multicube logistics centres we offer green contract logistics across all sectors under one roof. We produce the electricity for this ourselves – on the roofs with our own solar power plants. And we not only save thousands of tonnes of CO2 during storage, but also during transport: the goods are delivered to the customers in an environmentally friendly way, for example in vehicles that drive with reduced emissions.
3pl logistics - Modern Outsourcing
Too complex, too multi-layered, too specialised? As an experienced provider of contract logistics or third party logistics services, we have already seen and successfully implemented many things. We not only support our customers in outsourcing their logistics, but also tailor our 3pl service offering to their individual needs – right through to logistics-related value-added services or the development, construction and operation of the right logistics property. Efficient logistics fulfilment because we know how to do it.
Our services in contract logistics
As one of the leading contract logistics providers in Germany, pfenning logistics offers you the full range of logistics processes and services – from consulting to implementation and fulfilment. Together with our customers, we optimise their supply chain.
- Our storage concepts adapt to your requirements – from pure warehousing to cross docking and returns processing.
- Everything you outsource, we implement in proven, professional logistics processes and a powerful IT landscape.
- Trade supply, industrial plant transport, e-commerce distribution or procurement – our transport logistics are experienced in everything and prepared for everything.
By taking over logistics-related value added services, we look forward to being your partner and thus “part of your process”.
Make pfenning logistics your contract logistics provider in Germany
Outsourcing logistics is a matter of trust. In pfenning logistics you will find an experienced partner for outsourcing your warehouse and transport logistics. We provide you with cross-industry expertise and show you ways to further optimise your supply chain. Around 7,000 employees, 110 operating locations, around 1,000 trucks, soon 800,000 m² of logistics space and 125 years of experience form the foundation of our contract logistics services. Your advantages: customised concepts that grow with your needs, professional, efficient and cost-effective logistics processes, delivery and supply security, flexibility and adaptability. Switch to stable goods management cycles at an excellent price-performance ratio – we are happy to be “part of your process”!
Contract logistics for trade and industry
Regardless of whether complete logistics processes are to be outsourced in the retail, consumer goods, chemicals or automotive sectors, or whether a company only wants to use certain parts of our wide range of services: as a contract logistics company with many years of experience, we have extensive experience in all important key sectors – and certainly in yours too!
More than a contract logistics company
Through efficiency and maximum reliability, we can make many things easier for you in your daily processes. We are proud of this and work with vision. In our daily cooperation with our customers, we are often much more than just a contract logistics company: we develop and build logistics properties and provide support in logistics project development. For these services, our logistics centres have already received multiple awards such as the DGNB Platinum Certificate and the Logix for industrial buildings.
Automotive and industry, chemicals and pharmaceuticals, consumer goods and food, retail and e-commerce – with 125 years of experience in contract logistics, pfenning logistics offers efficient logistics fulfilment to customers in various sectors. Our expertise in warehousing, order picking and transporting a wide variety of goods, as well as our broad range of logistics-related value-added services, make us a reliable third-party logistics service provider in Germany. By outsourcing their logistics to pfenning logistics, customers can concentrate on what they do best and know best: their core business.
As experienced providers of contract logistics, we have a great deal of know-how in particular and maintain decades-long business relationships with our customers for the following industries:
Whether electrical appliances, cosmetics, furniture, textiles and much more – logistics fulfilment for the consumer goods market is one of pfenning logistics’ core competencies. Through our total of 100 locations, we offer manufacturers, retailers, webshop operators or start-ups suitable logistics solutions for the B2B and B2C sectors – as a complete service or for individual tasks.
Food logistics is one of our strengths – especially since the company’s roots go back 125 years, when the founder bought the first truck to transport milk. With these decades of experience, we have developed into the top 3 company for food contract logistics in Germany. Today, we drive to all major food retailers and discounters.
Temperature-controlled HACCP storage and IFS-certified food delivery are part of our corporate DNA. Quality and freshness are at the heart of our refrigeration expertise.
Storing, checking, picking and transporting – without logistics, no goods reach the shop and no Internet order reaches the consumer. Our contract logistics offer the right fulfilment solution for every product range and every sales channel. And if something comes back, these returns are also given a new chance thanks to our efficient returns management. And that not only makes the supplier happy, but also the environment.
No risks and no side effects – this is what pharmaceutical contract logistics from the pfenning group stands for. Storage, handling and transport – including those of temperature-controlled pharmaceutical products in various temperature ranges – are carried out on the basis of the current GDP recertification 2021. We offer our customers individual and unique, logistical combinations of active ingredients that pay off immediately.
We not only deliver logistics, but also solve special tasks relating to products and processes in the automotive and industrial sectors. Our industry-specific value-added services complement our proven logistics services and make us a premium partner in contract logistics.
Short distances, on-site expertise – we are not only on the spot for our customers, but with one of our approximately 110 locations, we are often right outside their factory gates.
With the pfenning group, the chemistry is right. Because we know the requirements for the storage, handling and transport of environmentally hazardous, flammable, corrosive or toxic substances. Particularly in this industry, it is important to have a partner with expertise in logistics outsourcing. The fact that we, as a 3pl partner, can offer this to our customers from the chemical industry on an equal footing is proven by the industry-specific and safety-related approvals as well as the protective measures that we consistently and successfully implement for all areas of chemical logistics – from the storage of hazardous goods to the transport of speciality chemicals.
Listening. Analyzing. Understanding. That’s what “Part of Your Process” means for a sustainable logistics solution.
Your entire contract logistics at a glance. From the strategy down to the operational cog.
Consulting. Concept. All good. But not perfect without the perfect rollout.
pfenning logistics at a glance
7,000 members of staff
All families live by their diversity – as does the pfenning family. Which is why we employ a wide range of talents. From warehouse operators to executives.
There is plenty of room for all sorts of things at the pfenning group’s locations: they are used for production, goods processing and the individual added-value services we provide for our customers.
We have the perfect fleet park equipment for the many and varied requirements of our industries: contemporary, flexible and powerful.
Top 3 retail logistics provider
With an extensive warehouse and distribution network and special vehicles, pfenning logistics is one of the Top 3 retail logistics service providers in Germany.
1,000,000 m² of warehouse space
Around the clock, seven days a week. Companies have room for all kinds of goods on the 500,000 m² of our logistics area.
Definition & importance of contract logistics
Contract logistics (also third party logistics or 3PL) characterizes a long-term cooperation between a company and a logistics service provider based on the division of labor. By concluding a contract logistics agreement, the logistics service provider takes over the supply chain management of the outsourcing company and thus becomes the link between the participants in the value chain instead of the client. The contract logistics provider adapts directly to the individual challenges of the customer.
The core tasks of contract logistics include the execution of central basic logistics functions such as warehousing, handling, order picking or transport, combined with the provision of individual value-added services. But also warehousing concepts for every requirement – from pure warehousing to cross docking and returns processing.
The objectives of a contract logistics agreement include the optimization of intra-, distribution- and transport logistics processes, the professionalization of supply chain management, the development of logistical flexibility while reducing operational or market-induced performance risks, secure fulfillment for customers and the sustainable use of logistics and IT structures already in place at the service provider. The bottom line is to reduce logistics costs while improving logistics performance and thus increasing the profitability of the outsourcing company.
By outsourcing its logistics to a competent service partner, the company can concentrate more on its core competencies. At the same time, it can benefit from the service provider’s special expertise and better access to resources such as land or transport capacities.
As the outsourcing company’s contractor, the contract logistics service provider is responsible for ensuring compliance with all relevant legal requirements. At the same time, it is the outsourcing company’s responsibility to ensure the use of up-to-date, innovative technologies in terms of building services and facility management, warehousing, vehicle technology and IT.
The service package, with its high degree of customization, ensures lean, efficient fulfillment of logistics and logistics-related functions that can be migrated over time. Thanks to the availability of logistics space, fleet equipment, means of transport, and IT structures, the logistics service provider is generally in a better position than the customer to respond quickly to growth or workload peaks – and thus to meet its responsibility for reliable maintenance of merchandise management cycles in seasonal business, for example.
Contract logistics can involve both logistics services, such as shipment tracking or customs clearance, and logistics-related value-added services, such as automated parts processing, assembly activities, goods preparation or returns management.
Trust arises from experience, reliability, conduct, references and reputation. For the customer, trust in the contract logistics service provider is important because it does not receive a concrete “product” when the contract is concluded, but instead places a vital basic operational function completely or to a large extent in external hands – and at the same time binds itself contractually over a longer period of time. In addition, the degree of individualization of the contract logistics service package is often so high that a change of service provider at short notice is hardly possible, also with a view to maintaining a reliable supply chain.
Concluding an outsourcing contract with a logistics service provider is not a bet on the future, but it is nevertheless a considerable leap of faith that the contractor must subsequently earn. Fairness in the drafting and interpretation of the contract as well as in the behavior after the contract has been concluded, open communication, not exploiting contractual and factual barriers to change for the outsourcing company, building up personal experience in different hierarchies of cooperation, acting at eye level in possible renegotiations without exploiting a possible advantageous position, agreeing on performance level agreements and reviewing them on the basis of key performance indicators or regular, continuous improvement processes – all this is suitable for building up corresponding trust capital.
Contract logistics reference solutions and the development of the contract logistics service provider’s reputation are suitable indicators for anticipating this trust capital and placing the decision of the logistics outsourcing company in favor of a 3PL provider on a solid foundation.