This option provides higher value capture than can be achieved by appointing a multi-client 4PL but it demands a higher level of integration among the transportation functions of the participating entities. Eliminating an external 3PL service provider leaves higher savings to be shared among the participating entities. However, doing so requires several enablers including data transparency; coordination of bidding cycles; standardization of systems; and above all, a certain level of trust. Compared to a 4PL, this option is a more evolved state of collaboration that has its inherent advantages but may take time to mature.
The operating model discussed in this paper is sustainable for two reasons: there is a monetary component and an opportunity for all concerned parties—shippers, carriers and 3PL providers—to benefit. What is required, however, is the trust and willingness to work together, especially on behalf of shippers. Look for part two of our series in September, which will cover the seven best practices for multi-modal operation.
Arun Kochar, Manager, A.T. Kearney can be reached at firstname.lastname@example.org. Sean Monahan, Partner, A.T. Kearney can be reached at email@example.com. Joy Peters, Principal, A.T. Kearney, can be reached at firstname.lastname@example.org. Jeff Ward, Partner, A.T. Kearney can be reached at email@example.com.