It's about sticking to the knitting

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.