Understanding the Logistics Contract: Key Insights and Best Practices

Logistics are the lifeblood of many companies and are especially important for the government and military. While the DoD has a tremendous tactical logistics presence, setting up logistics for CONUS operations, and most training operations, falls on contractors. Logistics contracting requires precision to assess market trends and procure parts and equipment.

With over forty years of experience in aviation and defense logistics, Greenwood Aerospace is your #1 choice for your logistics and procurement needs. Let’s dig a little deeper. 

What is Contract Logistics?

Contract logistics refers to the outsourcing of resource management tasks to a third-party company, specializing in planning and creating supply chains, designing facilities, warehousing, transporting, and distributing goods. Creating in-service supply chains for every conceivable operation is not very feasible because of the huge cost associated with it. Also, some missions do not really require military service personnel to handle them. 

Mainly, CONUS, non-tactical missions like undergraduate pilot training and other training missions are excellent candidates for both contract logistics and contract maintenance. 

Contract logistics companies manage inventory, process orders, and collect payments, allowing agencies and prime or subcontractors to focus on their core business interests. 

How Contract Logistics Works

Contract logistics involves a third-party company (3PL) taking responsibility for managing logistics operations, including storage, transportation, and distribution. The costs to handle these all in-house by the DoD are not only prohibitive, but basically impossible. They rely heavily on 3PL to keep the wheels of logistics turning. 

We at Greenwood Aerospace work  closely with the agency in question to understand their supply chain needs and develop a customized solution. Sometimes this is procurement and distribution. Other times it calls on us to use our 42,000 sq. ft. warehouse facility. 

Contract logistics companies use advanced technology, such as warehouse management systems, to optimize logistics operations and provide real-time visibility.

Key Components of Contract Logistics

Here are the six main things to look for in contract logistics.

  1. Warehousing & Distribution – Managing storage facilities and ensuring timely delivery of goods. Greenwood Aerospace maintains our own 42,000sq.ft. warehouse where we handle all storage and distribution from. 
  2. Transportation Management – Coordinating freight, shipping, and delivery logistics. Also, more military customers, mak
  3. Inventory Control – Tracking and managing stock levels efficiently.
  4. Order Fulfillment – Handling picking, packing, and shipping of products.
  5. Reverse Logistics – Managing returns, repairs, and recycling of goods.
  6. Supply Chain Optimization – Streamlining logistics to improve efficiency and reduce costs.

Choosing a Contract Logistics Partner

Choosing who to partner with in logistics is just as important as making the call to outsource contracting to a 3PL company. You need to trust that your logistics partner is experienced, understands the nuance of MIL-SPEC packaging, and has the customer service profile to make your process a breeze. 

Why You Need to Choose Greenwood Aerospace

A good contract logistics partner should have a strong track record of operational excellence and be able to provide value-added services. That’s why you need to partner with Greenwood Aerospace. With over forty years of experience, we are the trusted partner you need in your corner to support your mission. 

We offer aerospace, military, and government procurement services both nationally and internationally. Whether your needs are long-term or immediate, national security or public interest, our focus is on fast and innovative problem-solving to provide you support, limit downtime, and deliver lasting solutions to all your aerospace and facility needs. 

Benefits of Contract Logistics

The most significant benefit of contract logistics is cost savings, achieved through reduced transportation costs, lower inventory levels, and improved supply chain efficiency. The highest expense in the military are uniformed personnel, and the structure required to maintain them. But beyond the personnel, it is also the infrastructure cost to maintain logistics. Instead of maintaining large warehouses, fleets, and personnel, the military can outsource logistics operations to third-party providers (3PLs), reducing capital expenditures on facilities, vehicles, and equipment.

Contract logistics companies can also provide expertise in managing inventory, reverse logistics, and other specialized services. Another major detractor from using military service members for everything is the learning curve and the PCS model. A brand new junior enlisted or junior officer takes about 24-36 months to learn their job, and then get good at it. But around this point, they will usually PCS to another location. Also, special duty assignments and deployments pull personnel away from core responsibilities, taking them away from the competency pool.

By outsourcing logistics operations, military units or organizations can focus on their core business and improve their overall competitiveness.

Best Practices for Contract Logistics

From the perspective of the end user, you need to know a few things about contract logistics best practices. 

  1. Clearly Define the Requirements and Expectations

The contractual terms have to be clearly defined and delineated including service levels, established deliverables and agreed upon timelines. 

  1. Vendor Reliability & Security

Vet contractors thoroughly for experience in military logistics and compliance with defense regulations (e.g., ITAR, DFARS). Also, require background checks and security clearances for personnel handling sensitive materials. Generally, this is a requirement anyway since they are dealing with sensitive items, or items that require a security clearance to access. 

  1. Prioritizing Supply Chain Visibility & Tracking

Transparency is key, especially when you want to do business down the road with these agencies. Repeat business is always the goal. Use real-time tracking systems (RFID, GPS, blockchain) to monitor shipments, ensuring transparency.

Value-Added Services in Contract Logistics

Contract logistics companies can provide a range of value-added services, including co-packing, kitting, and MIL-SPEC packaging. Greenwood Aerospace offers all of these services to help streamline your mission profile.  We also provide:

  • Ground Support Equipment—we know aerospace programs extend beyond the aircraft, which is why we also provide ground support and ground support equipment. We leverage our purchasing history to ensure all ground support equipment meets your budget. Whether government, private, or defense contracting, we help build your program from the ground up.
  • Fixed-Wing Aircraft Acquisition & Support—Greenwood Aerospace streamlines the complex fixed-wing aircraft acquisition process for all our clients. We cover comprehensive bid proposal meetings and provide analysis on targeted aircraft to ensure they meet client specifications. 

Final Thoughts

A logistics contract can be the best way for your military unit to streamline your supply chain and supply chain management process. Logistics services from a 3PL service provider like Greenwood Aerospace will get your logistics management in order and will also save you money while allowing you to focus your resources on what matters most: your mission. We will take care of the rest with our experienced logistics professionals.