3RD PARTY LOGISTICS IN GLOBAL MARKET

Future Development Of 3rd Party Logistics In Global Market



Future Development Of 3rd Party Logistics In Global Market

1.0 Introduction

1.1 Background

Third-party logistics (3PL) providers have become important players in global supply chain management as increasing numbers of firms are outsourcing their logistics activities. However, the role of the information technology (IT) capability of these 3PL providers has not drawn much research attention. The way in which 3PL providers develop IT capability and how IT capability affects their competitive advantage deserve further investigation. This study has developed and tested a research model to address these issues. By integrating the concept of technology orientation from the strategic orientation literature into the resource-based theory, we investigate both the antecedents and the consequences of IT capability among 3PL providers.

The model was tested using survey data collected from 105 3PL firms in U.S. The results show that technology orientation has a significant impact on resource commitment to IT and managerial involvement in developing IT capability of 3PL firms. It also indicates that IT capability significantly affects three important dimensions of the competitive advantage of these firms, namely, reducing costs, providing innovative and customized services, and improving service quality.

More and more industrial firms see the real benefits with outsourcing their logistics operations to a third party. With the global economic downturn, retailers and suppliers change their business mode and force to cut their limited resources more stringently. 3PL Logistics parties spot the opportunity and provide more favorable rates, value added and good quality service. Through information technologies, 3PL Logistics help to reduce the total logistics costs, increase visibility and increase overall supply chain efficiency.

It approaches beneficiary cargo owners and with such tailored made package, explores the barriers of entry and develops a wide spectrum of logistics activities. The complete package includes technological applications, distribution networks and service coverage. So the customers even find it more efficient and cost effective to dissolve own shipping department by outsourcing the whole logistics activities to APL Logistics.

One good example is Toys R Us which APL Logistics manage the Toys R US existing shipping department in APL Logistics office. Right after the establishment, Toys R US no longer needs to spend resources in taking care such. But the expertise is retained. With the flat structure, it makes the company more focus in own special field and become more effective. Subsequently, facilitates them to generate competitive advantage.

Another area is air freight purchase order management. For Liz Claiborne, APL Logistics help group purchase orders which have close due dates into one air waybill to avoid minimum freight charges. APL Logistics focus in origin services export management. Other than management of vendors and purchase order, it expands into quality assurance, inspection, packaging and labeling. In addition to international freight management, the expansion is more into the destination service import management. With domestic freight management, it even involves in route design.

A latest development is in providing 'OceanGuaranteed' services which is the industry's first combined ocean-truck less-than-container load ...