This is an example of which of the following strategies?

A large wholesaler formerly owned a number of delivery trucks. The wholesaler sold all of its trucks and now purchases transportation services from fleet operators.

This is an example of which of the following strategies?

A. Selling and leasing back equipment.

B. Renting equipment on consignment.

C. Using a third-party logistics provider.

D. Using an owner-operator fleet.

View Answer

Answer: C

Explanation:

Context: The large wholesaler owned delivery trucks but sold them and now purchases transportation services from fleet operators.

Options Breakdown:

A. Selling and leasing back equipment: This would involve selling the trucks and then leasing them back, which is not the case here.

B. Renting equipment on consignment: Consignment refers to goods being held by one party while owned by another, which does not apply to the trucks being sold outright.

C. Using a third-party logistics provider: This involves outsourcing logistics functions, such as transportation, to an external company.

D. Using an owner-operator fleet: This would imply using independent drivers who own their trucks, which is not specifically indicated.

Correct Answer Justification: The wholesaler is outsourcing its transportation needs to fleet operators, which is the definition of using a third-party logistics provider (3PL).

Reference: Logistics and Supply Chain Management textbooks

Industry best practices and terminologies for third-party logistics providers (3PLs)