Las empresas forestales en Castilla y León

Third-party logistics industry has exploded significantly due to the ability to deliver cost savings, improved customer service, flexibility, expertise and other benefits. Most companies today more or less use 3PL services, but there are still some nonusers and those who were 3PL users but have abandoned the usage. Rushton et

31 al. (2000, p. 65) present some reasons why some companies do not choose to use a 3PL provider:

The third-party distribution leads to a loss of control over the delivery operation.

The use of third-party leads to a loss of control over the company’s logistics variables (this means that the company is no longer in a position to define the number, type or size of depots, or vehicle types and sizes etc.).

3PL may lack the experience of client companies’ products and markets, although the growth in specialist distribution companies has helped to change this point of view.

Service levels are poor among third-party distributors.

The balance of power is shifted away from the user in favour of the contractor, as the contractor owns the systems and the distribution resources.

There can be a problem trying to co-ordinate 3PL delivery service with a client company’s sales service.

The loss of direct influence at the point of delivery because the driver is delivering a number of different companies’ products.

A third part cannot guarantee brand integrity.

There may be a problem with the confidentiality of information when using a third-party distribution service.

There may be an issue with cultural incompatibility between contractor and client.

Mercer Management Consulting (2003) has conducted a survey among those who do not want to expand their uses of 3PL services. The survey focuses on identifying the reasons why the participating companies do not want to make further expansion of the 3PL usage. The survey results show that one-third of these companies believe they have necessary capability within their own company. Other reasons include: no confidence in service level, good service provider not available, not convinced of

32 benefits, too expensive, bad experience in the past, wrong concept/mindset, and lack of IT capabilities.

Since the fast development of third-party industry, many commentators and researchers have moved their attention to studying the reasons why some companies are against logistics outsourcing. Richardson (2004)identifies that organizations do not outsource logistics function because 3PL providers do not have the necessary comfort service level, and they fear lack of control over their logistics operation. Also, a study about logistics in UK conducted by Jaafar and Rafiq (2005) shows insight into the reasons against logistics outsourcing. The identified reasons include: logistics functions still manageable, fear of losing control, service not suited to product, service not suited to company’s structure and size, costs are too high.

Moreover, the China Supply Chain Council (2005) and Arroyo et al. (2006) claim that 3PL usage is more popular in developed countries, such as in European countries and America, than in developing countries such as China and Mexico. In addition, Arroyo et al. (2006) identify the direct reason that companies do not use 3PL providers in Mexico is because the 3PL services in the country are expensive. Further, the authors disclose that lack of competent 3PL providers is the main root of such situation.

Furthermore, based on the 11th annual study of third-party logistics, an extensive study about 3PL usage in North America, Western Europe, Asia-Pacific, and Latin America, Langley et al. (2006) identify the most prevalent reason that prevents companies from using 3PL providers is that ‘logistics is viewed as core competency at the respondent’s company’. Some other reasons are: cost would not be reduced, control would weaken, service level would not be improved, having more expertise, logistics is too important to outsource, corporate philosophy reject logistics outsourcing, 3PL providers lack global capabilities, hard to form trusting relationships, and shipment security issues.

33 Langley et al. (2007) have conducted their 12th annual study of third-party logistics, and similar results are concluded about why companies do not use 3PL providers. Among the reasons, that ‘logistics is viewed as a core competency at our firm’ is still the most popular reason for the non-users. However, for those current 3PL users, the authors identify that although there is respectable level of success in 3PL using, some current users still complain about the use of 3PL providers. The list of frequently reported problems is shown in Table 2.2. Among the problems, service level improvements not realized,lack of ongoing improvementsand achievements in offerings, and cost reductions not realized are the three most encountered problems. Obviously, these problems will hinder the development of 3PL industry, and directly affect the use of 3PL. To achieve high customer satisfaction and gain further development in logistics outsourcing, 3PL providers should focus on how to prove that they can do what they say they can.

Table 2.2. Continuing problems with 3PL providers as reported by customers Source: Langley et al. (2007, p.38).

34 The above discussion about drivers against 3PL usage does not mean that the use of 3PL is a negative practice, in contrast, it indicates that there is plenty of room for 3PL providers to improve their services and strategies. Through providing more effective logistics services, 3PL providers will be the most important strategic partner of different business organizations.