Definition – Contract logistics
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Logistics includes all tasks for planning, controlling, providing and optimizing processes along the value chain. Contract logistics is a business segment of logistics services. It is geared towards long-term cooperation between manufacturers and logistics service providers. This cooperation based on the division of labor is regulated by a contract (service contract). Complex logistical service packages are the focus of attention. Contract logistics service providers are also referred to as system service providers. This is because they take on both logistics and logistics-related tasks along the value chain.
Contract logistics is characterized by:
- Integration of functions: The integration of additional logistical services, such as order processing, with non-logistical additional services, such as assembly work, is intended to generate added value for the customer.
- High degree of individualization: Services are provided individually according to the customer’s wishes. Orientation to individual needs and the resulting strong integration into the customer’s value chain make the contract logistics provider irreplaceable, at least for a certain period of time.
- Minimum business volume: The minimum business volume for contract logistics services amounts to EUR 0.5 to 1 million per year. Logistics service providers expect further growth rates in contract logistics.
- Long-term safeguarding of the business relationship: The contract regulates the rights and obligations of both parties. Service contracts in contract logistics are generally concluded for at least one year. The usual term is 3 – 5 years.
More information on logistics can be found under sales logistics.
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