Contract logistics is a strategic model where companies outsource part or all of their supply chain operations to specialized providers through long-term, customized agreements. This approach goes beyond traditional logistics by encompassing comprehensive services such as inventory management, quality control, value-added services (e.g., labeling, packaging), and both domestic and international distribution. By partnering with experienced logistics providers, businesses can focus on their core activities while benefiting from improved efficiency, scalability, and control over their supply chains.

The success of contract logistics hinges on tailored solutions that align with a company's specific needs. Providers design logistics strategies based on detailed service level agreements (SLAs), key performance indicators (KPIs), and workflows. Technology plays a pivotal role, with real-time inventory management, digital systems for order fulfillment, and advanced analytics enhancing operational efficiency. Choosing a contract-based logistics model yields both immediate and long-term advantages, such as efficiency, cost optimization, scalability, technology access, visibility and control, and customer experience. It will make the biggest impact on these key industries: pharmaceuticals, e-commerce, manufacturing, high-tech and electronic, spare parts and aftermarket, and also retail and FMCG. A case study from Savino Del Bene's FDS Canada hub illustrates the effectiveness of this model in optimizing logistics operations. Overall, contract logistics offers businesses a flexible and efficient means to manage complex supply chains, driving both cost savings and improved service levels.

Source:
https://www.savinodelbene.com/contract-logistics-definition-operation-strategic-advantages/