Sustainable cost reductions obtained by using a fourth party logistics provider

Journal of Transport and Supply Chain Management

Field Value
Title Sustainable cost reductions obtained by using a fourth party logistics provider
Creator Kiggell, Lance S. Kilbourn, Peter J. Heyns, Gert J.
Subject — fourth party logistics; logistics outsourcing; contract management; courier distribution; supply chain management; sustainable cost savings
Description Background: In a rapidly changing global business environment, the outsourcing of logistics activities to fourth party logistics (4PL) service providers is growing in popularity as a strategy for efficiency and customer service improvements. However, there are very few empirical studies on logistics outsourcing performance. In addition, there is a lack of information on the effectiveness of a 4PL model, especially from a South African perspective.Objectives: The main purpose of this study was to determine if the use of a 4PL model to manage the courier distribution for a major retailer in South Africa was able to achieve ongoing cost savings for the client.Method: This research entails a case study of a large non-food retailer in South Africa. Secondary quantitative distribution cost data covering a 10-year period was analysed, using a time series method. The findings were verified through semi-structured interviews of key personnel involved in the implementation and management of the outsourcing contract.Results: The outsourcing of courier distribution management resulted in the targeted cost savings for the client organisation to be exceeded. Cost savings were consistent over a 10-year period.Conclusion: The findings of this study supports the theory that the outsourcing of logistics functions can result in sustainable cost savings for clients if done properly. It adds to the limited body of independent evidence that exists on the matter of sustainable results obtained from 4PL outsourcing agreements.
Publisher AOSIS
Date 2021-11-25
Type info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion — Quantitative analysis of secondary data; interviews
Format text/html application/epub+zip text/xml application/pdf
Identifier 10.4102/jtscm.v15i0.606
Source Journal of Transport and Supply Chain Management; Vol 15 (2021); 13 pages 1995-5235 2310-8789
Language eng
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Coverage South Africa Modern day Case study
Rights Copyright (c) 2021 Lance S. Kiggell, Peter J. Kilbourn, Gert J. Heyns