UK Third Party Logistics

UK Third Party Logistics

Abstract

The growth of the Third Party Logistics (TPL) business has caused many firms from different industries to enter the field. We are interested in how their different strategies develop over time with a special focus on how they balance between general problem solving capability and the degree of customer adaptation. In the development of their strategy the newly entered firms shown to be highly influenced by existing business and its network. However, at a later stage the case firms were all focused on moving into more advanced and complex services (4pl type of services) without considerations to their traditional business strategy. We have also identified some issues of importance when managing the continued TPL business strategy. One issue is about the organisation of the TPL business and its need for neutrality from traditional business. The next issue is about the internationalisation of the TPL business and the need of a partly different pattern and network. Finally, the issue of coping with strategic alliances, mergers and acquisitions seems vital for understanding and developing the business.

The Role of UK Third Party Logistics, Changes and Developments

1. Background

The third party logistics (TPL) provider business is developing as a result of the emerging demand of advanced logistics services. Globalization, lead time reductions, customer orientation, and outsourcing are some major changes contributing to this interest in logistics. Integration of the supply chain has become an important way for industry to gain competitive advantage. As a result, the role of logistics providers is changing both in content and in complexity. New firms from different fields are entering the market competing with the traditional transport and warehousing firms.

This paper will be about TPL providers as players in a growth industry and how they change within their relationships with customers, customers' customers, and partners in order to fulfil the new demands.

The way the TPL providers manage the relationship to its customers and handle effects on the total network of relationships will be of basic importance for their strategic edge on the market. To develop skills, competencies, and gain scale/scope advantages that are superior to customers will be necessary in order to add customer value. Such a development mostly necessitates co-utilization of resources, creation of specific knowledge, and coordination of activities of a portfolio of customers.

Therefore, a main challenge for a TPL provider is to balance between an ability of high adaptation to individual customers and organizing the systems and the business for coordination of several customers. The way this is balanced will guide the strategic development of the TPL providers and is of vital importance for the resources needed, activities to be performed, and core competence development.

Only a few studies have been about TPL providers as firms, their structure and categorization. Little interest has been paid to how the development of their relationships has influenced the TPL provider in their strategic development. Most studies have taken shipper's perspective on logistics alliances, its development over time, and the type and evaluation of the services offered ...