SpendEdge, a global procurement market intelligence firm, has announced the release of its Global 4PL Market – Procurement Intelligence Report.
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While the ability to focus on core operations and to reduce a significant portion of operational expenditure is steering buyers towards investing in the 4PL market, apprehensions over losing visibility on their inventory are keeping a majority of the buyers away from outsourcing to 4PL logistics companies. The slightest downtime in service delivery by 4PL logistics companies will cost buyers severe losses in terms of money and time. These factors will inhibit the spend growth in the 4PL market that has the potential to reach a value of more than USD 30 billion with spend momentum accelerating at a CAGR of over 13%.
Among the strategies enlisted in this report, it is advised that buyers engage with 4PL logistics companies that can offer cost-control to the buyers by ensuring that their in-house and third-party partners offer consistency in meeting their delivery timelines. This will reduce buyers’ costs such as back-up inventory costs for critical raw materials or finished goods.
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What are the 4PL logistics price trends that are driving the overall price structure in the global 4PL market?
- A rise in the personnel cost of service providers across the globe is likely to drive service prices in the 4PL market during the forecast period. Inflation, rising standards of living (employees), and the decline in the availability of experienced labor will be the contributing factors to rising personnel costs.
- The steep rise in oil and gas prices will increase 4PL logistics companies’ expenditure on fuel and electricity generation costs. This will have an inflationary impact on the buyer’s procurement spend in the 4PL market.
What are the scopes of optimizing procurement spend amidst these upward rising 4PL logistics price trends?
The scopes to optimize spend are ample and it will require strategic insights into the supply market. Strategic selection of 4PL logistics companies will not only fulfill the buyer’s delivery requirements but will also play a critical role in guiding the buyers to optimize their procurement spend. Companies who are known to adopt cost-optimizing measures pass on their profits to the buyers in the form of reduced product prices.
Negotiate on the power of control
It is crucial for buyers to negotiate with 4PL logistics companies for administrative control over all technological systems that contain critical data. This will ensure 100% transparency and visibility over logistics operations. Buyers should demand visibility across the entire supply chain using real-time metrics such as mobile and telematics systems.
Evaluate technological capabilities of 4PL logistics companies
4PL logistics companies are expected to leverage logistics platforms such as TMS, WMS, and mobile applications. Such technologies are known to provide buyers better control and visibility over their supply chain, and high collaboration across stakeholders that are involved in its supply chain, thus improving the supply chain efficiency. In the 4PL market, buyers should also assess the integration capabilities of software platforms offered by 4PL logistics companies to ensure that there are no additional costs incurred for software implementation.
Failure to track the trends in real-time is resulting in severe losses in terms of business opportunities in the 4PL market. Request a free demo to access our web-based procurement platform to get regular and real-time insights into this market for free.
Some of the key topics covered in this report are:
- 4PL market spend segmentation by region
- Total cost of ownership analysis in the 4PL market
- Regional spend opportunity for 4PL logistics companies
- 4PL logistics companies cost structure
- 4PL logistics companies selection criteria
- 4PL logistics companies under coverage
- Procurement best practices
- Category management objectives
- Cost saving opportunities in the 4PL market
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