Once primarily reserved for organizing transport, companies increasingly use lead logistics providers as single-contact operators of enhanced warehousing resources.
In their efforts to improve supply chains, companies have long relied on external experts to organize the fastest and most cost-effective transport and logistics solutions. That often involves designation of a lead transport provider to select the best multi-modal options for obtaining optimum speed, handing and savings. The same concept is now taking root in warehousing, with freight forwarders serving as lead logistics providers maximizing performance and value in mature and ferociously competitive storage markets.
A major contribution of lead logistics providers (LLPs) is the analysis of clients’ existing warehousing schemes, and resulting proposals to boost efficiencies by reducing facilities and processes involved. In doing that, LLPs examine factors covering geographical location, services provided, certification and costs as they design more economical networks to satisfy customers’ freight requirements.
LLPs then use their experience in dense and competitive storage markets to negotiate the best mix of logistics capacities and services at lowest prices attainable. Once that new system is in place, LLPs act as customers’ unique point of contact for planning and fulfilling all logistics needs.
A recent example involved a global transport, defense and IT company requesting international freight forwarding leader Bolloré Logistics to serve as its LLP in France. In doing so, Bolloré Logistics was asked to organize and manage the storage, handling and processing structure for the client’s considerably diverse freight activities.
In its brief, however, the customer stressed its goal in adopting an LLP strategy was not simply improving the operational, performance and cost efficiencies of its network. It wanted that done, it added, through measurable and verifiable means that would allow it to analyze future gains as well.
To that end, Bolloré Logistics first evaluated the 28 French warehouses in the customer’s previous logistics arrangement. Next, it opened bidding to existing partners and outside operators as it assembled a new, improved logistics network. Ultimately, six facilities were selected, using “local hero” criteria that analyzed location, experience, performance and cost advantages.
Common operating procedures were then established applied across the new network – as were lean management techniques to boost efficiencies and cut costs. Similarly, IT tools like Neopost tracking were created or adapted for use by all participants, while access to Bolloré Logistics’ LINK system provided the real-time updates on location and progress of freight.
“This rationalized and reduced constellation of local heroes allows for single-contact and –steering of freight,” say Jean-Yves Gras, Vice President of Supply Chain and Logistics for Bolloré Logistics in Paris. “It unifies procedures, lowers costs and optimizes transparency using Bolloré Logistics IT tools. It’s ideal in enhancing simplicity, fluidity and efficiency for our clients.”
Creation of the condensed, integrated and unified warehousing network was even more challenging in this case due to the diverse size and volumes of the customer’s cargo. Assembled, over-sized aeronautical components that are transported across France can weigh up to nine tons. Some IT system components, meanwhile, can be relatively small or rarely exceed 10 kilos.
Bolloré Logistics’ worldwide experience in juggling such contrasting goods under a single system was a major factor behind the client choosing it as its LLP. So, too was the group’s deep experience and specialized global network dedicated to aeronautic transport and logistics activity.
Following Bolloré Logistics’ successful LLP effort in creating that new logistics network, the client is now looking to extend the same strategy across similarly mature and competitive markets in Europe – and possibly the world. Due to legal and contractual complexities, replication of that process must be handled on a country-by-country basis. The collective result, however, would be more efficient, transparent and economical supply chains on a global level.