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Hitachi Transport System

Learning Center for 3PL Beginners

Learning Center for 3PL Beginners Main Visual

Puzzled by 3PL terminologies? We can help you here to understand some of the key words that you may often encounter.

3PL (3rd Party Logistics) Services

Outsourcing wherein companies put all or part of their logistics duties out to contract with a third-party logistics specialist. It is also called system logistics and contract logistics.
The 3rd party operator develops comprehensive measures of operational improvement for logistics-related functions among the customer's business operation, such as procurement of materials/parts, production, sales, and after-sales. In implementing such new operating plans, the logistics operator interconnects the related information systems and controls the operation through them. With the operation control in place, the 3PL operator shall strive for optimal SCM, such as stabilization/improvement of service quality, cost reduction, and/or high-efficiency operation.
Your outsourcing to the 3PL model can also make positive impact in terms of compliance and environmental considerations.

WMS (Warehouse Management System)

The "WMS" refers to the information systems with a variety of functions such as inbound/outbound management of materials or products, inventory control, etc. at a warehouse. It is an abbreviation of warehouse management system.
In addition to conducting staffing management and various operation processes within logistics centers, the WMS visualizes the sequence of warehouse duties, including inbound, inspection, picking, distribution processing, packing, and outbound, and play vital roles leading to improved precision and work optimization, inventory compression, and improved customer satisfaction.

DC (Distribution Center)/TC (Transfer Center)

A "DC" refers to a distribution center and a "TC" to a transfer center, each of which plays different roles.
Whereas a DC fulfills a storage function, a TC is a pass-through type of facility without keeping any inventories at site, since all received goods/cargoes are quickly sorted right after the arrival, in preparation for the delivery to final destinations. A TC is also called a "cross dock center" and "XD-type facility" because its operation process is called cross-docking or X-docking.


One of the warehouse operations. To promptly sort received goods/cargoes and re-prepare shipments for delivery right after its arrival, without taking in any inventories.
A TC is often referred as a "cross-dock center" and "XD-type facility" because it usually performs this cross-docking function. However, it is not uncommon for a DC to perform the cross-docking, when the facility has integrated functions of both DC and TC.

Green Logistics

Various actions and measures in the logistics field for global environment management and the reduction of greenhouse gases (GHG) emissions.
Outsourcing to 3PL operators not only promotes simplification of packaging (or ecological packaging), eco-friendly vehicles and modal shifts, but also broadly rationalizes/optimizes logistics operations and leads to indirect reduction of environmental burdens. Furthermore, consolidated logistics operations on shared logistics platforms are gathering attention because they are effective in achieving both optimization and environmental measures at the same time.

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