Wondering what contract logistics is all about? This guide will walk you through the definition and examples of the services it includes—helping you understand how this model works and whether it’s worth considering for your business. Read on to learn the pros and cons of contract logistics and decide whether this solution is right for your operations.
What is contract logistics?
To understand how contract logistics works, let’s start with a clear definition.
Contract logistics is an outsourcing service that covers warehouse-related operations. It involves handing over control of your goods to an external logistics provider. At Axell Group, which includes Axell Logistics, we offer storage space combined with full responsibility for the inventory—right through to its distribution. We tailor our warehouse processes and services to each client’s needs with a flexible, customer-focused approach.
How does contract logistics differ from general outsourcing? Outsourcing is a broader concept, referring to the delegation of entire business functions. In contrast, contract logistics refers specifically to logistics operations, making it one part of the wider outsourcing spectrum.
How does contract logistics work in practice?
The scope and form of contract logistics depend entirely on the client’s expectations. It can include:
- Receiving, storing, and transporting goods
- Ensuring proper storage conditions
- Seasonal warehousing
- Labeling and order picking
- Packing and shipping to the final destination
- Return logistics
These are the core services a logistics partner can provide under a contract logistics agreement. Additionally, cross-docking is often included—receiving and temporarily storing goods before transferring them to the next transport phase.
Contract logistics can also cover full order management for e-commerce. That means handling the entire order fulfillment process, including storage, packaging in custom-branded materials, and fast delivery to end customers. This streamlines your operations while maintaining full control and transparency throughout.
What are the benefits of contract logistics?
Contract logistics is gaining popularity, and for good reason. It offers a number of tangible benefits:
Process control – Despite outsourcing the operations, you retain full visibility into the supply chain. Each stage is monitored and executed according to your standards.
Cost reduction – No need to invest in your own warehouse infrastructure or hire warehouse staff. The logistics provider handles everything, reducing your personnel and facility-related expenses.
Expertise & time savings – Planning and managing a supply chain takes time and know-how. Contract logistics lets specialists take care of stock control, packing, labeling, and distribution—so you can focus on growing your business.
Who should use these services?
Now that you know what contract logistics is, let’s consider who can benefit from it. These services are ideal for both small and large companies. For those just starting out, it’s a great option because you don’t need your own storage space to keep products before they’re shipped to customers.
For larger companies, it offers a path to sustainable growth. Warehouse services are tailored to each client’s individual needs. Depending on the season or sales level, you can adjust the volume of goods stored. You also don’t need to hire additional staff to operate the warehouse. The logistics company’s employees will ensure goods are stored properly.
In addition, logistics providers such as Axell Group offer value-added services like labeling, shrink-wrapping, and managing POS/POSM materials. This ensures your goods are packed according to specifications and promotional materials are delivered with the goods to the specified store or sales location. Transport services ensure fast delivery to the final destination.
As you can see, by using the services that fall under Axell Logistics’ contract logistics, you save time and money. Our qualified experts work every day to ensure smooth goods receiving, storage, and well-organized delivery logistics. We aim to provide the financial benefits you expect and ensure customer satisfaction—without adding to your workload.
