Outsourced Logistics in a Post-pandemic World
Updated: Sep 12
According to this article by Sean Ashcroft for Supply Chain Digital, more companies than ever are turning to 3PL and 4PL services as they seek to collaborate on logistics to avoid supply chain disruption.
The article quotes Dan Myers (MD UK & I, for XPO Logistics) which provides innovative transportation solutions for some of the most demanding supply chains in the world.
“Immediately after the pandemic, closed-book fixed-lane rates were the sought-after solution as businesses sought to control costs. The pandemic drove brands to analyse expenses across the board due to shifts in supply and demand volume and the associated costs of each.”
But he says that since the start of 2023
“Brands are thinking more strategically, creating strategic alliances with partners to avoid any repeat of supply chain difficulties"
"They are supplementing this approach with short-term bridging solutions and contracts,”
He goes on to explain that in today’s market, logistics suppliers must give options in:
Phased investment planning
Flexible fleet types
A “dynamically balanced core” with a 4PL provision.
“So we could manage capital expenditure investment to suit the client’s needs, for example but we also have a rounded capability to offer hybrid, core, and flexible solutions within the networks, allowing us to move with the client's journey, whatever that may be.”
Nucleus does agree. But notes just how hard it is for a 3PL with many fixed assets to convert to a 4PL model. The incentive structures are inherently different. If the business has not started as a 4PL with minimal fixed costs, it is incredibly difficult to convert its operations from a 3PL into a 4PL.