Popular Logistics models today – The optimal choice for businesses

Logistics model

Logistics plays a crucial role in ensuring the smoothness and efficiency of the supply chain. To optimize business operations and enhance competitive advantage, companies must choose the Logistics model that best fits both their services and market. Therefore, it is essential to understand the common Logistics models and how to operate them effectively to make the most appropriate choice.

1. In-house Logistics model 

In-house Logistics is when a company takes full responsibility for all logistics activities, from warehousing, transportation, and packaging to product distribution. In this model, the business owns and operates all Logistics-related infrastructure, vehicles, and personnel.

Advantages

    • Comprehensive control: the company has full control over the entire Logistics process, ensuring consistent quality and service.

    • Quick response: this model allows businesses to flexibly respond to market changes and urgent demands.

Challenges

    • High investment costs: implementing in-house Logistics requires significant investment in infrastructure, vehicles, and personnel, along with high operating costs.

    • Scaling challenges: as the business grows, managing internal Logistics can become complicated and less efficient.

2. Third-party Logistics (3PL) model 

In the 3PL model, businesses outsource Logistics services to a professional partner who is responsible for one or more activities in the supply chain, including transportation, warehousing, packaging, and distribution.

Advantages

    • Cost savings: businesses can reduce operational costs and infrastructure investments by not directly managing logistics activities.

    • Professionalism: 3PL providers often have experience and modern technology to optimize Logistics, helping businesses operate more efficiently.

    • Scalability: businesses can easily expand their Logistics capacity without further infrastructure investment.

Challenges

    • Partial control loss: outsourcing logistics can result in losing some control over the process, leading to potential service quality risks.

    • Partner dependency: businesses may face challenges if the 3PL provider fails to meet quality or timeline requirements.

3. Integrated Logistics model 

Integrated logistics is where a single logistics provider offers a range of services, from transportation, warehousing, order management, to customs clearance, all within one system.

Advantages

    • Process optimization: integrating all Logistics services into a synchronized system allows businesses to optimize costs, reduce errors, and increase supply chain transparency.

    • Increased flexibility: businesses can easily adjust their operations to quickly meet market demand changes.

    • Risk reduction: centralized management helps minimize risks such as loss, damage, and errors in operations.

Challenges

    • Provider dependency: businesses need to choose a reliable integrated Logistics partner to ensure the quality and reliability of the supply chain.

    • Potential high costs: while reducing operational costs in some areas, this model can incur significant expenses if the wrong provider is chosen.

4. Hybrid Logistics model 

The hybrid model combines in-house logistics and third-party logistics. In this approach, businesses manage part of the logistics activities and outsource others to ensure fast and efficient operations.

Advantages

    • Flexibility: Businesses can control critical stages of logistics and outsource other services to save costs and time.

    • Resource optimization: by only outsourcing non-core services, businesses can maximize resource use while maintaining control over core activities.

Challenges

    • Complex management: this model requires businesses to seamlessly coordinate between internal and outsourced activities to ensure synchronization throughout the supply chain.

5. Global Logistics model 

Global Logistics applies to businesses with international operations. In this model, companies can use global logistics partners to manage transportation, warehousing, and distribution across multiple countries.

Advantages

    • Access to international markets: this model enables businesses to enter global markets and expand operations beyond national borders.

    • Enhanced supply chain efficiency: with global Logistics partners, businesses can optimize international transportation and distribution, ensuring timely and efficient delivery.

Challenges

    • Complex management: managing multiple factors such as import/export regulations, customs procedures, and international transportation adds complexity.

    • High costs: operating a global Logistics model is often more expensive than domestic Logistics due to its complexity and wide operational scope.

Logistics model

VELA’s platform meets all Logistics needs 

With the vision of becoming a 4PL+ in the Logistics industry, VELA continuously improves and provides integrated multiservice Logistics solutions to deliver exceptional value to customers. VELA’s integrated services help businesses optimize their supply chains with numerous benefits:

    • End-to-end management: offering comprehensive Logistics services from warehousing, transportation, to order processing, ensuring smooth and interconnected supply chain operations.

    • Operational cost optimization: by integrating services, businesses can reduce costs from partnering with multiple providers while saving resources and optimizing processes.

    • Transparency and easy tracking: VELA’s system provides clear, detailed information on goods status, allowing businesses to monitor and control every step of the supply chain.

    • Risk minimization: integrating multiple services into one system reduces the risk of loss, damage, or errors in order processing through centralized and efficient management.

    • Flexibility in scaling: VELA helps businesses easily expand operations without Logistical management hurdles, thanks to its flexible integrated services.

    • Professional customs clearance: beyond transportation services, VELA supports businesses in handling customs procedures, ensuring fast and compliant import/export processes.

    • Improved customer experience: with efficient Logistics management and fast delivery, VELA helps businesses enhance service quality, improving customer satisfaction and loyalty.

    • Modern technology application: VELA uses advanced technology solutions in Logistics management, automating processes, optimizing efficiency, and providing businesses with valuable data analysis tools for timely decision-making.

    • Seamless international service management: VELA offers integrated multiservice Logistics solutions not only domestically but also internationally, supporting businesses in expanding their market with ease and convenience.

Choosing the right Logistics model plays a crucial role in ensuring the success and efficiency of the supply chain. Depending on scale, business goals, and financial capacity, each company will choose a different Logistics model. Implementing the right model not only helps businesses optimize costs, increase control but also enhance competitiveness in the market. Choosing VELA will enable businesses to improve operational efficiency and build a solid competitive advantage, ensuring a flexible, sustainable, and seamless supply chain.