In tough economic times, will companies be increasingly tempted to outsource logistics and distribution operations?
The answer may be Yes, especially given the many hungry 3PLs that may be tempted to dangle low ball prices to pick up the business.
In some cases, the strategy may be not only to outsource a part of logistics operations, such as management of individual DCs, but actually to outsource the entire logistics function.
That’s in fact what tech giant IBM recently did, announcing in December that it was hiring Geodis, a French logistics services provider (LSP), which IBM was already using for some logistics operations, such as service parts delivery and reverse logistics, to manage its entire logistics network globally.
In the relationship, Geodis will serve as a “lead logistics provider,” sometimes also called a “4PL,” and will provide management services for IBM’s already largely outsourced logistics function. In other words, Geodis will become an outsourced manager of other logistics outsourcers. Combined, IBM now spends approximately $1.3 billion on global logistics management.
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