Download: 3PL Subway Map Europe 2017

Calm before the storm in logistics market

The explosive growth in e-commerce means that B2C e-fulfilment is an attractive new market for the traditional logistics service providers, and they are fervently exploring ways to apply new technology in this domain. The fifth edition of supply Chain Movement’s 3Pl subway Map of europe doesn’t appear to show many changes in the competitive landscape, but start-ups – both from the netherlands and abroad – are the source of the real innovations in logistics nowadays.

By Martijn Lofvers

According to a recent international study by the US magazine Supply Chain Digest, 69 percent of shippers regard innovation by logistics service providers as very important. Unfortunately, these customers are generally disappointed in their suppliers’ process innovation abilities, with 26 percent rating them as ‘low’ and a further 48 percent as only ‘average’. There are some logistics service providers who are working on pilot projects related to process innovation, however. The application of augmented reality for order picking in warehouses, as used by Arvato for its customer Sennheiser, improves productivity by 30 percent. Meanwhile DHL is using drones to deliver parcels in mountainous regions and to the German Wadden Islands.

During a recent supply chain conference in Amsterdam, Archana Vidyasekar, an analyst at Frost & Sullivan, observed that most of the innovation in the logistics sector is coming from start-ups. Aided by a visual by CB Insights, she showed that many of FedEx’s services are now being offered by a whole host of start-ups such as Flexport and Freightos for freight forwarding. “And these start-ups are a lot more user-friendly that FedEx,” she stated. This could mean that shippers will no longer need their logistics service providers for certain activities, but can handle them themselves instead.

Logistics start-ups and research Research by the University of Stuttgart in 2016 revealed that logistics service providers are champions in the use of supply chain apps. 50 percent of logistics service providers utilize mobile apps for business purposes, compared with just five percent of project-based tech companies. So when it comes to innovation, logistics service providers are mainly followers and are hardly ever the ones to launch a start-up themselves. As a result, logistics service providers are facing stiff competition from new start-ups introducing apps that make it easy for shippers to arrange supplementary logistics activities (i.e. beyond the core activities of transport and warehousing) themselves rather than having to outsource them.

The latest edition of Supply Chain Movement’s 3PL Subway Map of Europe visualizes the various specializations of the logistics service providers in Europe for the fifth consecutive year. The allocation of a subway station along a line for a specific service is based on the number of customers and the percentage of the total revenue for this service. Whereas in the previous edition the acquisitions by XPO Logistics and DSV had a noticeable impact, this year there have been only a few minor changes and additions.

One of the subway lines on this year’s map indicates logistics control towers, also referred to as ‘4PL’. At Supply Chain Media, we are currently working with the Dutch consultancy firm LogiLex on a pan-European study of control towers in view of the strong growth in this specific area of expertise. This activity appears to require further explanation, since many shippers are under the impression that outsourcing their activities to a control tower run by a logistics service provider means relinquishing control themselves. Findings from this study will be published in the November issue of Supply Chain Movement.

Download: SCM 3PL Subway Map Europe 2017

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