Shippers keen to grow outsourced logistics functions - report

As businesses evolve and consumers change their demands, supply chains continue to become more complex – with shippers calling for logistics partners who offer comprehensive and easily integrated operations solutions that can manage the growing complexity of their businesses. That’s according to a recent survey undertaken by supply chain software solutions company Accellos. The Coloradobased company’s study, titled ‘Retail Compliance: Leveraging technology to exceed big box retailers’ expectations’, found that 65% of shippers would like to outsource the entire logistics responsibility as the 3PL sector continues to grow, allowing shippers to focus on their core business, while only 22% are returning to insourcing. The result of this more collaborative and innovation-focused partnership enabled by the 4PL model creates more consistency for the shipper, according to the report. Another oftenoverlooked benefit to the shipper in these partnerships is that with better information solutions they are more able to align supply chain expense with revenue, says Accellos. “By outsourcing their logistics functions as well as relying on a 4PL to secure and coordinate the activities of multiple leading 3PL providers, with facilities in the best suited locations, they are able to benefit from ramping up or reducing their expenditure, based on growing or shrinking volumes. At the same time they can ensure the best service is being delivered. Finally, says Accellos, the model leads to higher levels of profitability for the 3PL providers that secure the role as 4PL. “As they move beyond the tactical/ transactional services into more strategic service offerings, they can avoid the danger of commoditisation of their services and instead will be able to contract higher margin activities.” By focusing on leveraging the right technology and taking a collaborative approach to the 3PL and shipper partnership, a logistics provider can utilise their best practices to the fullest extent to become a 4PL, according to the report.