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4PLs are ‘in ideal position’ to promote collaboration

4PLs are ‘in ideal position’ to promote collaboration
10/09/2017

4PLs have been singled out by researchers as being in the “ideal position” to promote collaboration across massive logistics networks in ways that would not be possible for individual companies within those networks.

The study in Transportation Research Procedia looks at how just one 4PL can manage multiple networks – in this example, four European transportation networks with over 3,000 shipments per week and nearly 4,000 supply relations.

“As a neutral partner, the fourth party logistics provider (4PL) is in an ideal position to manage and promote horizontal collaboration between its partners, combining the benefits of outsourcing and horizontal collaboration for them,” the authors write.

This leads to a network that is optimised in its entirety, instead of each partner’s own network being optimised independently, and this holistic approach drives reductions in CO2 emissions and maximises cost savings too.

The article notes how 4PLs provide a means for rival companies to work together, promoting horizontal collaboration without raising trust issues among businesses that are usually direct competitors.

Working with a 4PL also means those companies do not have to invest in technology in order to collaborate, as the 4PL can provide all the necessary ICT, data sharing and knowhow to find new partners and collaborate with them on a mutual win-win basis.

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