Confidence in Outsourcing to a Third-Party Logistics Provider

Outsourcing to a third-party logistics provider can produce measurable financial, operational or customer-service improvements

Greeneville, Tenn.August 5, 2014—Third-party logistics company Landair announced a new logistics service feature, Guaranteed Value Acceleration, to give supply chain managers greater confidence that outsourcing to a third-party logistics provider (3PL) produces predictably measurable financial, operational or customer-service improvements.

Landair will offer Guaranteed Value Acceleration (GVA) on three contract logistics services: dedicated contract carriage, warehouse/distribution management and transportation management. To provide GVA, Landair’s logistics engineers involve each customer in a collaborative Value Identification and Enablement Workshop (VIEW) to define value in terms specific and meaningful to that customer’s business.

Landair then builds GVA metrics and milestones into the customer’s logistics strategy and contract, committing to progressively higher levels of value over the contract’s duration. If value metrics and milestones are missed, the contract specifies commensurate financial guarantees.

“We believe the concept of value between a customer and a 3PL is too important to be defined loosely or just talked about casually,” said John Tweed, Landair’s president. “Today’s supply chain managers have every right to feel that value is becoming like the weather: Everybody talks about it, but nobody ever seems to do much about it. At Landair, we’re focused on changing that. We’re looking to have very concrete discussions with customers about value?and making very tangible commitments.”

Tweed said open, candid information sharing is critical in determining whether a customer’s supply chain lends itself to a strategy that includes GVA. “Defining value in terms relevant to each customer is where everything starts,” he said. “That, plus exploring readiness to make any operational changes that may be needed to extract greater value. That’s what we focus on in the VIEW process.

“Once we have in-depth conversations around value—whether it’s bottom-line cost savings, higher customer service levels or something else—we can look for ways to build GVA into the logistics strategy we design and the contractual agreement we make.”

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