Executive Briefings

Continuing to Add Logistics Value in a Commodity-centric Environment

Third-party logistics will not become a commoditized service as long as providers continue to add value and differentiate their product offerings, says Greg Spudic, vice president of marketing and sales at Dimerco Express.

If 3PLs try to compete based on cost they are effectively shrinking the playing field and limiting options for themselves and their customers, says Spudic. "If a customer relationship is based strictly on price and the concept that my solution is basically the same as that of Company B or Company C, we are all just going through a revolving door," he says. "It may be here today, out tomorrow and back in the next day."

Instead, 3PLs need to provide a more personalized service, with solutions that are aligned to individual customer's strategies and goals, he says. This includes being honest with customers when their needs are not a good match for a 3PL's capabilities, he says. "Offer a different solution, even if that means partnering or forming an alliance with another organization. Don't try to shrink down the playing field or put a round peg into a square hole."

3PLs also need to be more pro-active about introducing new solutions, rather than waiting for the customer to make requests, he says. "If we are continually in a reactive role, that's when things can become commoditized. I think the 3PL must always be the driver in a solution-based scenario."

This means that 3PLs need to be ahead of the curve in terms of market trends, he says. "Whether it is anticipating changes in capacity or of rate fluctuations, 3PLs have to react quickly and offer responsive solutions upfront, without waiting for customers to say "˜we need this.'"

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If 3PLs try to compete based on cost they are effectively shrinking the playing field and limiting options for themselves and their customers, says Spudic. "If a customer relationship is based strictly on price and the concept that my solution is basically the same as that of Company B or Company C, we are all just going through a revolving door," he says. "It may be here today, out tomorrow and back in the next day."

Instead, 3PLs need to provide a more personalized service, with solutions that are aligned to individual customer's strategies and goals, he says. This includes being honest with customers when their needs are not a good match for a 3PL's capabilities, he says. "Offer a different solution, even if that means partnering or forming an alliance with another organization. Don't try to shrink down the playing field or put a round peg into a square hole."

3PLs also need to be more pro-active about introducing new solutions, rather than waiting for the customer to make requests, he says. "If we are continually in a reactive role, that's when things can become commoditized. I think the 3PL must always be the driver in a solution-based scenario."

This means that 3PLs need to be ahead of the curve in terms of market trends, he says. "Whether it is anticipating changes in capacity or of rate fluctuations, 3PLs have to react quickly and offer responsive solutions upfront, without waiting for customers to say "˜we need this.'"

To view the video in its entirety, click here


Keywords: supply chain, it supply chain, supply chain management, it supply chain management, supply chain management it, supply chain management scm, value chain, value chain it, 3pl, third party logistics, logistics management, logistics & supply chain, logistics services, supply chain solutions, logistics it solutions, supply chain planning, supply chain systems, supply chain services