• Free for qualified executives and consultants to industry

  • Receive quarterly issues of Area Development Magazine and special market report and directory issues


An Explosion of 3PL Services: How Are These Expanding to Meet Customer Needs?

A host of new services are turning 3PLs into company "partners" in the logistics process.

Logistics Distribution Warehousing 2007
(page 3 of 3)
New opportunities also come about as a result of these discussions. "We find that the best new services tend to be situational - unique to a customer's needs," says Melville. That is, customers often come to the company with a problem. Then, collaboratively, both organizations will come up with a solution. "We are aware of technologies, capabilities, and best practices that the customer is not familiar with," he explains. "We combine these with the unique attributes of the customer's network to create new value."

GENCO's Mauney agrees with the importance of close relationships and sharing of information. "Customers know their business processes and their [own] customers better than we do. They also have a vision. However, they should look to us to provide input on best practices and benchmarking," he explains. As such, GENCO likes to get as much information as it can from customers on what they want to accomplish. Then, it can come back with its experience to make best-practice suggestions. "When we combine their objectives with our strategies, we come up with the best solutions," Mauney says.

Franzetta is also a fan of cooperation. "When we have intervened in establishing dialogue between a 3PL and a customer, the results have been outstanding," he says. Unfortunately, though, without this kind of mediation, both sides tend to resist. "The 3PL seems to feel that the meeting will be time-consuming, while the customer tends to fear the invasion of proprietary information," he continues. "Yet, once they actually do get involved with each other, they both tend to expand the interface well beyond either of their initial considerations."

Christensen provides perspective: "The key to success is being candid in your dialogue and exchange of information," he suggests. This, of course, requires building trust. "Ultimately, the goal should be a cost-plus relationship, where you both work together to take cost out of the system," he concludes.

Follow Area Development