Transport Forum - IMPERIAL Logistics

Transport Forum 

09 September 2010 

IMPERIAL Logistics © 

File name: Logistics & SCM Further Development Framework Date: 12/03/2010 

1

The World of an LSP in the World of the Big R 

• The economic downturn has challenged LSPs to contend with factors such 

as unpredictable demand, volatility in fuel costs and currency valuation, 

and excess inventory 

• Overcoming these obstacles in the near-term, shippers are employing two 

key tactics: 

– Cutting operating costs 

– Improving forecasting and inventory management 

• But they’re also using the downturn as an opportunity to assess their 

supply chains’ strengths and weaknesses and make changes designed to 

increase agility, be more responsive and reduce costs 

– Strategies here include network redesign and creative collaboration with LSPs 

and even competitors 

– LSPs such as IMPERIAL Logistics weather the storm using steps such as sharing 

assets across multiple customers to reduce risk 



2

The World of an LSP in the World of the Big R 

“When times get tough, many companies head for the trenches and 

turn inward in terms of their priorities. This is exactly the wrong to do, 

particularly as it relates to the need for inter-organisational cooperation 

in the supply chain.” 

Dr. John Langley, Georgia Tech, Supply Chain Digest, 12 th Feb’09 



3

Outsourcing Logistics and Supply Chains 

• Outsourcing is not a fad or passing trend 

– Most outsourced business service globally is logistics 

– Outsourcing is a viable option for companies 

• Businesses outsource for many and varied reasons: 

– Reduce costs 

– Business transformation 

– Improve operations 

– Overcome lack of internal capabilities 

– Keep up with competitors 

– Gain competitive advantage 

– Improve capabilities 

– Increase service (and revenue) 

– Reduce inventory 

– Increase inventory velocity and turns 

– Mitigate capital investment 

– Improve cash flow 

– Turn fixed costs into variable costs 

• Benefits are either tangible or intangible 



4

Shippers Currently Outsource a Wide 

Variety of Logistics Services 

Outsourced Logistics Service 

All Regions 

North 

America Europe Asia Pacific 

Latin 

America 

Domestic Transportation 86% 75% 92% 95% 80% 

International Transportation 84% 70% 91% 91% 88% 

Customs Brokerage 71% 73% 61% 78% 74% 

Warehousing 68% 71% 72% 65% 52% 

Forwarding 65% 61% 57% 82% 66% 

Cross-Docking 39% 40% 42% 42% 20% 

Product Labeling, Packaging, Assembly, Kitting 38% 33% 42% 40% 34% 

Reverse Logistics (defective, repair, return) 38% 31% 43% 47% 26% 

Freight Bill Auditing and Payment 33% 53% 24% 26% 28% 

Transportation Planning and Management 32% 32% 33% 34% 20% 

Information Technology (IT) Services 30% 28% 34% 30% 26% 

Fleet Management 22% 14% 26% 28% 15% 

Supply Chain Consultancy Services Provided by 3PLs 21% 21% 19% 25% 20% 

Customer Service 13% 10% 13% 15% 14% 

Order Entry, Processing and Fulfillment 13% 12% 8% 20% 15% 

LLP/4PL Services 12% 10% 12% 17% 6% 

Source: The State of Logistics Outsourcing: 2009 third-party logistics – Georgia Institute of Technology 



5

Shippers Currently Outsource a Wide 

Variety of Logistics Services 

Outsourced Logistics Service 

All Regions 

North 

America Europe Asia Pacific 

Latin 

America 

Domestic Transportation 86% 75% 92% 95% 80% 

International Transportation 84% 70% 91% 91% 88% 

Customs Brokerage 71% 73% 61% 78% 74% 

Warehousing 68% 71% 72% 65% 52% 

Forwarding 65% 61% 57% 82% 66% 

Cross-Docking 39% 40% 42% 42% 20% 

Product Labeling, Packaging, Assembly, Kitting 38% 33% 42% 40% 34% 

Reverse Logistics (defective, repair, return) 38% 31% 43% 47% 26% 

Freight Bill Auditing and Payment 33% 53% 24% 26% 28% 

Transportation Planning and Management 32% 32% 33% 34% 20% 

Information Technology (IT) Services 30% 28% 34% 30% 26% 

Fleet Management 22% 14% 26% 28% 15% 

Supply Chain Consultancy Services Provided by 3PLs 21% 21% 19% 25% 20% 

Customer Service 13% 10% 13% 15% 14% 

Order Entry, Processing and Fulfillment 13% 12% 8% 20% 15% 

LLP/4PL Services 12% 10% 12% 17% 6% 

Source: The State of Logistics Outsourcing: 2009 third-party logistics – Georgia Institute of Technology 



6

Shippers Currently Outsource a Wide Variety 

of Logistics Services 

• The most frequently outsourced activities tend to be those that are more 

transactional, operational and repetitive 



7

Final Thoughts 

• “Desirable” aspects of LSPs as reported by clients 

– Multiple activities … example: transportation and warehousing 

– Integration of activities 

– Some form of analytical / solution-based contribution to client 

• Key critical LSP success factors include … 

– Well understood goals and objectives of relationship, useful measurements 

and measurement strategies 

– Understanding business needs of both client and LSP organisations 

– Trust, commitment and communications 

– Willingness to share risks and rewards 

– Multi-level organisational alignment between client and LSP 

– Integrated technologies and operations 

– Management capability and philosophy; ability to reach consensus on matters 

of strategic and operational importance 

– Dispute resolution procedures and process for eventual termination or 

dissolution of relationship 



8

Background 

Partnership 

Innovation 

• Creative, customer solutions 

• Respond to unstated customer needs 

• Generate profitability/cash flow 

Contractual 

Value 

• Extra services/capabilities 

• Need for information flow 

• May generate some cash 

Transactional 

Quality 

• Entry into game 

• Basic services 

• Expected 

• Don’t get paid 



9

Conclusion 

Coming together is a beginning. Keeping together is 

progress. Working together is success." - Henry Ford 



10

THANK YOU 



11

Transport Forum - IMPERIAL Logistics

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