Outsourcing is not a new idea. The idea of a vertically integrated manufacturer has been out of vogue for many years. However, under the banner of business process outsourcing (BPO), the outsourcing trend has accelerated, and today companies are outsourcing portions of their businesses that they would never have considered outsourcing just a few years ago.
In the case of logistics, freight forwarders and third-party logistics (3PLs) companies have been around for many years and were early providers of logistics outsourcing services. These service providers typically focused on a subset of a company’s logistics needs, such as warehousing, or export logistics. Today, however, lead logistics providers (LLPs) are emerging to provide deep logistics knowledge, transactional processing capabilities for all modes of transport and supply chain technology that together add up to a complete logistics outsourcing solution.

The entrance of LLPs is providing a new alternative for companies who wish to use leading edge supply chain software technologies. Initially, the only way to access supply chain software was to license it and install it on a company’s own servers. Then, hosted, or application service provider (ASP), models became fashionable - at least it became fashionable to talk about them. For the most part the hosted software model has not met with widespread adoption in the area of supply chain software. Today, however, a new model is on the rise, incorporating a complete logistics outsourcing offering with supply chain software — the best of both worlds.

LLPs are emerging as an alternative supplier of supply chain technology to manufacturers. This marriage of outsourcing models — obtaining logistics expertise and supply chain technology all from the same supplier — truly offers the best of both worlds. Today LLPs can provide better supply chain technology expertise and functionality, at a lower cost than traditional software licensing models while offering a complete package of services and technology, all from a single supplier.

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