The bundling of logistics functions, to provide a comprehensive and complex service package, using concrete and individual customer requirements is also referred to as contract logistics. This is an agreement (contract) between a logistics service provider and for example, an industrial company. The proposed and offered services go far beyond the classical storage, transportation and handling of goods. A contract logistics provider can manage, for example, the ordering and payment processes, handle returns, accept installation work, etc. realize packaging or set formation of products.
Frequently, the logistics service provider in this context is required to make a broad investment to be able to meet individual customer requirements. In addition to the cost of the logistics the service provider obtains a comprehensive know-how in return and is thus a difficult irreplaceable partner in the supply chain. For this reason also a high degree of specialization and a niche strategy, especially for small to mid-sized companies is very promising. Both partners integrate their processes and embark in a close partnership. For this reason, a solid foundation of trust is the focus here, this includes a so-called Open Book Policy in the basics of pricing and billing will set out in transparent and open and can be viewed by both parties.
The providers of logistics services are classically divided into different categories. The classical transport services are provided by Second Party Logistics Provider (2PL). The next category are classified as third party logistics (3PL) providers of contract logistics services. The level of 4PL logistics focuses primarily on administrative tasks and discussions. The coordination of several logistics service provider on behalf of a customer can be done by Lead Logistics Provider (LLP). Usually they don't have any own resources to provide logistics services.