That’s a big question with many moving parts – literally.
The first part of the question is to define logistics. The definition could vary vastly depending on who is asked and what their focus may be. In short, logistics encompasses the physical process of accumulating resources, the transportation or positioning of those resources and the final distribution of resources.
In recent times, the term became commonplace in the military, describing the efforts involved in the acquisition, storage and shipment of supplies, equipment, arsenal, munitions, encampments and soldiers.
What encompasses logistics can be very broad as well and covers essentially everything from a resource’s origin to a finished good’s destination. Most supply chains are highly integrated with varying degrees of automation allowing goods to move seamlessly from mode to mode until destination. Logistics as an industry includes the sourcing of goods, manufacturing, inventory, handling/sortation, transportation, storage/warehousing, etc. Further, logistics expense lines can include IT, in terms of the exchange of information and data, as well as the cost of security.
Logistics can be as simple as a transaction wherein a shipper makes its own product and ships it directly to its customer or more complex involving many layers of handlers in third-party logistics provider (3PL) and brokered transactions. The number of parties on any shipment may extend well beyond just a third party, including 4PLs and on up.
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