How customers equal real profits

Greater customer demand and continued growth in outsourcing are driving a trend for Australian third party logistics companies to band together and become more innovative in providing a broader range of services.

Customer ProfitabilityWith e-commerce creating a need for faster, smaller, more direct and globally widespread deliveries, logistics companies such as Sydney-based Logistics Bureau are assisting clients with their integrated logistics needs by sourcing a range of companies across a spectrum of services.

These could include various transport companies, many of which are now consortia – from general freight companies to local courier companies – and possibly even mailhouses or printing companies.

This shift in demand is also due to larger companies outsourcing more and more services in order to concentrate on their core business.

Logistics Bureau director Rob O’Byrne says although meeting these new demands may be challenging, the key to success lies in logistics service providers taking a clever approach.

“The challenge for Australian-based companies is to develop broader-based services or partner with other logistics companies to provide these services,” O’Byrne says.

“The market is demanding a range of services that have particular key components – that are very specialised and may not be offered by a traditional logistics company alone.”

“For example, a general freight company that uses big trucks to move goods up and down the eastern states may be required to team together with a courier company that uses small vehicles in the local area. In the past, clients may have had to deal with the air freight company, the line haul company for interstate transport and a dozen different transport companies. Now they can just deal with one person and one company – a key contractor who manages other groups.”

O’Byrne adds that the rapidly changing market is seeing more importance placed on the role of the third and fourth party logistics provider (3PLs & 4PLS), many of whom are banding together to improve efficiencies.

“Logistics service providers decrease delivery time, inventory costs including storage, and costs associated with the ordering process,” he says.

Logistics Bureau is a management consultancy specialising in logistics and the supply chain. With strategic alliances in Thailand and the United Kingdom, Logistics Bureau is increasingly servicing the international market, supporting regional logistics companies across a variety of services. The company has a track record of outsourcing logistics for both buyers and sellers across a range of industries and countries throughout Asia and the world.