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unrealized service-levels or cost reductions, lack of continuous improvement

#1 disappointment of 3PL

non asset based providers

-3PL arranges for services from other companies that own equipment -The 3PL tends to not own equipment (assets)

intermodal marketing companies

-Also known as Shippers' Agents and Consolidators -Facilitators of transportation only -Assume no legal liability -Function like a broker, but typically work for the shipper instead of the carrier -Usually handle shipper's payment to carrier - shippers must beware

financial based

-Helps customers with financial flows in the supply chain -Traditional services include freight rating, freight payment, freight bill auditing, accounting services -Expanded services include IT systems for freight visibility, electronic payment, carrier compliance reporting, claims management

household goods industry

-Local agent visits shipment site and estimates weight and cost -Shipper signs order for service (contract) -Packing may/may not be included -Van is loaded as scheduled and moved to destination site -Final charges based on actual weight and services provided Typical revenue distribution: 10% to Franchise, 25% to pickup agency, 50% to vehicle owner, 15% to destination agency

distribution based

-Most were originally public or contract warehousing services -Expanded services into inventory management and order fulfillment. -Some have integrated transport services into offerings -Wide range of market reach, from local to global

shippers' associations

-Non-profit cooperative consolidators -Function much like surface forwarders and brokers, but only for members -Negotiates volume discounts with transportation providers -Arranges flexible services -Better service and lower costs to members

forwarder based

-Originated from intermediaries such as freight forwarders, brokers and agents -Arrange transport-related services for less-than-full vehicle shipments and for international shipments

information based

-Services include online freight brokering and cargo planning, routing, and scheduling -Also offer online access to transportation and warehouse management systems (TMS & WMS)

inventory management, warehousing, financial services, transport, distribution

3PL services

3PL

An external supplier that performs all or a part of a company's logistics functions

surface forwarders

Consolidates small shipments Acts as both a shipper and a carrier Assumes responsibility for the shipment

freight brokers

Middlemen between shipper and motor carrier -Like a real estate agent or stock broker Normally represents the carrier Seeks freight on their behalf -Charges the shipper, takes broker fee (approximately 8-10%), gives rest to trucking company Are NOT considered a carrier -Do not have to maintain cargo insurance -Must post a $10,000 surety bond

transportation based

Most were originally based on this -Developed 3PL subsidiaries in response to expanding customer requirements -Services now include transport management, dedicated contract carriage, and fulfillment center operation

air freight forwarder

Pickup/delivery, consolidator -Similar to surface freight forwarders, but use airlines for line haul service -Focus on high value, time-sensitive goods -Documents, spare parts, medical components Benefits -Fast, door-to-door, single carrier service -Single bill of lading, tracing services Disadvantage - cost of service

intermediary services

Surface freight forwarder Air freight forwarder Freight brokers Intermodal Marketing Companies Shippers' Associations

asset based providers

The 3PL owns the equipment used to provide services

customer's other logistics activities

Transport services should always be integrated with __

4PL

as integrated service providers - subcontractors

facilitators

corporate environmental factors that enhance partnership development and growth Compatible cultures, mgmt. philosophy, relationship commitment

Opportunity for cost reductions, Ability to focus on core competencies, Opportunity to improve customer service, Improve return on assets

reasons companies use 3PLs

better service, low cost, order cycle time reduction, more flexibility to meet fluctuating demand, Fixed logistics assets reduced

results achieved by 3PLs

drivers, facilitators, components, outcomes

step 2: decision to form relationship

drivers

the compelling reasons to partner Synergy from the partnership that cannot otherwise be attained

Transportation, Distribution, Forwarder, Financial, Information

types of 3pls

components

work itself: joint business planning, look for collaborative win-win solutions, -data sharing