Both shippers and
logistics service
providers benefit
when each sticks to
its knitting – the shipper to
manufacturing or sourcing
the goods, and the logistics
provider to moving them
as efficiently and costeffectively
as possible.
“In order to attain more
highly functioning and
cost-effective supply chains,
shippers need strong,
lengthy and partner-focused
relationships with their
3PLs and 4PLs,” says John
Langley, author of the 2014
Third-Party Logistics Study
conducted by Capgemini.
According to Langley
these strong partnerships
are needed if exporters are
to expand into the African
market.
“Operating in Africa
presents considerable
obstacles and risks,
including cumbersome
and corrupt clearance
processes, inefficient
logistics and significant
deficits in physical transport
infrastructure,” he says,
adding “opportunities
are ripe for those with an
appetite for making logistics
processes more standard and
efficient”.
4PL comes into its own
given the diverse nature of
the African market, with no
single transport or logistics
supplier being able to provide
services across all countries.
This is because a “fourthparty
logistics provider
(4PL)” is by definition
independent,
and can
select the
best 3PL
service
providers for
a particular
task or
region.
“The 4PL
is not part
of a larger
logistics
service
provider.
This
contrasts
with 3PLs
who are part
of a parent
company that provides
warehouse, forwarding,
transport or other services,”
says Tom Craig of US-based
LTD Management.
It is important for the 4PL
– or lead logistics – service
provider to remain neutral.
“Neutrality means
objectivity. The 3PL uses
the services of the parent
company in his offering to
customers, whether or not
it fits the needs. A 4PL is an
independent who will work
with the buyer to design,
implement and manage
supply chain solutions
that meet the client’s needs,”
he says.
Successful 3PL and 4Pl
relationships are built on
transparency, according to
Langley.
“Despite
ongoing
churn in
shipper-3PL
relationships,
in general
shippers are
increasing
their use of
outsourced
logistics
services, and
shippers and
3PLs are
now about
equally satisfied (70% and
69%, respectively) with the
openness, transparency and
good communication in their
relationships.”
Shippers are looking for
more support: Ongoing
global economic challenges
and
shifting
trade
alliances have
become “the
new normal” –
and have created the need
and opportunity for service
providers who have invested
in specialist skills.
Research conducted by
Korn/Ferry International
has found that today’s
supply chain leaders need to
be accomplished “in several
dimensions of maturity and
agility”.
Cargo owners and
shippers should also be
asking questions about the
information technology
capabilities of their
logistics suppliers – another
opportunity for 4PL
logistics companies.
Gartner research
forecasts that a 30-fold
increase in Internetconnected
physical devices
by 2020 will
significantly alter supply
chain leader information
access and cyber-risk
exposure.
The Internet of Things
(IoT) is forecast to reach 26
billion installed units by
2020, up from 0.9 billion just
five years ago, and will
impact the information
available to supply chain
leaders and how the supply
chain operates.
“As the number of
softwareembedded
digitalphysical
products grows,
the methods of product
development and life cycle
management across the
supply chain will change,”
says Michael Burkett,
managing vice president at
Gartner.
“Supply chain teams will
have to take ownership for
coordinating the delivery
of quality-perfect orders
of these digital-physical
products. This extends
beyond developing and
ensuring quality of a single
device to managing the
larger complexity of these
connected systems,” he
says.
INSERT
4PL comes into
its own given the
diverse nature of the
African market, with
no single transport
or logistics supplier
being able to provide
services across all
countries.
