The discussion of 3PL solutions has grown considerably in recent months. What opportunities and what challenges might be hidden in this approach to outsourcing – particularly in light of the dramatic changes in trade, transport and intralogistics?

The principle of outsourcing a company's transport and warehouse functions and leaving them to third-party logistics providers – in a nutshell: 3PL – has much to offer. Because these specialised logistics service providers can generally handle the wide range of tasks in this area faster, more comprehensively and, when it comes to the bottom line, more cost-effectively than an internal mechanism. Especially in the context of increasing globalisation, which now affects almost every industry and companies of almost every size, the big players in particular offer international networks that would be scarcely affordable for any single company.

Quite apart from these global networks, and from the savings in warehousing and the vehicle fleet, there is another argument today in favour of outsourcing: the increasing time pressure with regard to deliveries. Not least because of the Internet, the expectations of customers have increased massively: "ordered today, delivered tomorrow" has become not only the ambitious promise of large retail chains – it is also taken for granted by most consumers. If it takes longer, you lose out – and not only in the rating forums on the social networks. Because this demand is also gaining increasing acceptance in the B2B sector, and the term just-in-time has taken on a new significance. It is clear that this transition requires an extraordinary eff ort – from sorting and distribution to IT – an eff ort that can almost only really be managed by specialists.

Successful cooperation with external logistics providers

Given this challenging environment, it is not difficult to understand why demand for 3PL continues to grow among companies. As far back as ten years ago, CapGemini/Ernst & Young found, in one of the first major studies on this subject, that about 80 per cent of the companies surveyed in the United States, Asia, Europe and South Africa used external partners to varying degrees, with the trend on the increase. The current "19th Annual Third-Party Logistics Study 2015" comes to similar conclusions. Both senders (92 %) and logistics companies (98 %) consider this type of partnership to be successful. More than two thirds of senders (70 %) see benefits within a year, and 75 % of them are satisfied with the speed and flexibility of their 3PL providers – a decisive competitive factor in the current climate. Other figures confirm the trend towards the growing concentration observed by insiders: more than a half of respondents (53 %) indicated that they would reduce or consolidate the number of their logistics partners.

Outsourcing: Consignment must be perfectly coordinated

As encouraging as the outlook for external logistics is, it is also accompanied by heavy pressure to innovate. Because to use the tight time windows most effectively, internal processes from goods receipt to inspection, sorting and distribution to forwarding must be perfectly coordinated. Flexibility also plays a crucial role in this, not only because of changing sales volumes and increasingly varied product ranges. As Managing Director of Interroll Automation GmbH, Robert Lugauer is aware of the unique challenges facing the industry: "We are living in fast changing times and, just to take the example of textiles, contracts usually run between two and three years. It is now clear that in order to achieve highly efficient handling, Companies need to invest in a material flow system that does not pay for itself with just one customer over two years." The important thing is to structure the technical facilities as a whole so that several different customers can be served, and so that new customer requirements are met if contracts are not renewed. But this also means the highest level of flexibility for the conveying and sorting equipment. Both in terms of capacity and the sortability of very different products. As a specialist, Lugauer also sees another trend with regard to 3PL: the providers are increasingly inclined to extend their services beyond pure logistics: "Here, not only is the entire distribution function, including IT, taken care of, there are also fnishing processes such as special packaging for promotions and the like. That's an interesting solution for the efficient use of 3PL approaches, especially for medium-sized companies."

There can be no doubt that the more important logistics becomes as a marketing tool, the more third-party logistics providers will continue to grow. The opportunities here are not even remotely exhausted. But this also means new challenges in terms of technical design. The subject remains more than interesting.

Subscribe to the Interroll Blog News

Share this post

Write comment