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The relationship between transport and environment is paradox in nature. From one perspective transportation is categorised in two areas, passenger transportation which consists of all transport of individual, refers to all forms of public and private transport of commuters, passenger baggage transport whether scheduled or unscheduled. The second category of transportation is freight movements meaning the movement of raw materials, of work in progress, finished goods from supplier to consumer and of returns of used and new products back to supplier. Freight movement is also consists of movement of agricultural products (food, fertilizers) and animals. Freight movement is progressively intermodal and multimodal and makes use of local, regional, national and international operations. Transportation causes a considerable amount of harmful emissions, which causes problems that become harmful and costly to the society and environment. According to EU analysis 35% of freight transport accounts for eight percent of external transport cost to the GDP in European Union (EEA, 2001). The transport sector contributes to 30 percent of the CO2 emissions in OECD countries. 32 percent of Co2 emitted is accounted for by freight transport, while passenger transport accounts for 48 percent of emissions of CO2. This share of transport emissions however increases yearly. In this paper I will be focusing on freight transport (goods and services) impact on the environment. Based on different mode of transport which includes air cargo, shipping, rail, trucking, pipelines and intermodal terminals, the effects on the environment are majorly air pollution, water pollution, noise, global climate concerns, accidents, land take and habitat fragmentation both for humans and animals. The effects of freight transport on the environment affects the interrelation of the environmental system which is between the following:-
Atmosphere (air quality)
Hydrosphere (water quality)
Lithosphere (soil quality)
Biosphere (living organisms)
In the process of defining the environmental impacts of freight movement, three components could be considered:
Firstly the environmental stressors which include pollutants, noise, or exotic and toxic species are released in natural ecosystems. Each tonne of goods transported adds an additional stress on the environment.
The cumulative amount of stress placed on the environment depends on the quantity of goods and the destination and distance they are transported. The total stress can be calculated as the quantity of goods times the distance carried multiplied by the stress per tonne. In addition the mode of transportation used is also put in to consideration.
The total stress is also determined by the nature of the receiving environment. Visible characteristics such as physical ecosystem characteristics, how populated is the area affected, and how critical or endangered species in the receiving ecosystem will determine the willingness to avoid the impact and payments.
This paper will be focusing more on the first component primarily to the other two components, with a little attention to the third component.
Overview of Freight Movement Impacts on the Environment
Air pollution: Air pollution is considerably seen has the most dangerous environmental threat caused by transportation. Highway vehicles (i.e. cars, trucks, vans e.t.c), marine engines (i.e. propels ships, boats), locomotive (i.e. diesel, coal trains e.t.c), and aircraft are the main causes of pollutant which affects air quality causing damage to human heath and the climatic changes in the environmental system, all these includes gas and emissions that are particulate matters. All these toxic air pollutant are closely related with the cause of cancer, cardiovascular (heart arteries, capillaries and veins), respiratory and neurological diseases. Air pollution reduces the availability of oxygen which affects the blood stream, and can be extremely harmful to public health if Carbon Monoxide (CO) is inhaled; also nitrogen dioxide (NO2) emission from different modes of transportation when inhaled reduces lung function, affects the respiratory immune defence system and put humans at higher risk of respiratory problems. Acid rain is caused by the emission of sulphur dioxide (SO2) and nitrogen oxide in the atmosphere from different acid compounds that when they get mixed in the cloud water. Acid rain has serious disruption on the built environment, limits agricultural crop yields and causes deforestation. Acid rain also causes smog, affecting the visibility in the environment having adverse effect on the quality of life and less attraction of tourist activities. Emission from vehicle exhausts as well as non exhaust like dust raise due to vehicle and road abrasion affects air quality in such areas.
The impact of the modes of transportation on air quality
Air transport: air transport emission during take - off and landing contributes to air pollution and global warming. Although emission from air transportation are minor relatively to other means of transportation of goods and services, the rate at which air transportation is adding to the emission from transportation is faster than all other emission source, due to the increase in air travels and air freight. (Vedantham and Oppenheimer 1994, p 1). From a survey two thirds of air freight is carried by commercial passenger flights, and estimated increases in air freight is expected to be distributed through passenger flights. (Snape and Metcalfe p. 176). Low level emission is recorded during take off and landing of air transport, nitrogen oxides, carbon monoxide, hydrocarbons and carbon dioxide during high altitude flight are pollutants to the atmosphere and ozone layer. These pollutants with other compounds could lead to smog.
Road/trucking: the movement of freight by road or truck as a great impact on the air quality. The longer a truck is driven the more emission it impacts on the environment. Emission from both exhaust and non exhaust, like the abrasion between truck and road raises dust. Carbon Monoxide (CO), sulphur dioxide (SO2), nitrogen dioxide (NO2) are all effects of emission on the environment.
Rail: rail transportation is the less damaging mode of land transportation when compared with trucking. The effect of rail transport on the environment is determined greatly on the source of power generation for the train, like in Europe most of the trains are powered by electricity. In some other part of the world like Nigeria, trains are powered by coal (locomotive) this generates a lot of pollutant to the environment.
Shipping: freight transportation through shipping are not a major source of air pollution. Nevertheless, most of ships are powered by combustion engines, so they do emit air pollutants. Emission occurs both underway on the waters and while docking.
Pipelines: this mode of transportation is usually safe and free of air pollution, except in cases of accidents, pipe bursting or vandalized. Apart from the pumps been used to pump or compress oil or gas, which emit air pollutant like all other machine does.
Generally most of the other mode of transportation does not really have effect on water quality, except for shipping and in - land water ways transport, and also in times of accidents i.e pipeline bursting, car accident entering the waters, oil spill e.t.c. The activities of shipping are increasing because of the increase in demand for shipping. Emissions from marine transport as also increased as well; the main effects of marine transport on water subsequently arise from dredging, waste disposal, ballast waters and oil spills. Dredging is essential to build and maintain water depth for ease of shipping operations and port accessibility. Dredging affects the marine biological diversity.
Waste disposal of plastics at sea is a major source of environmental harm, since the material are both sizeable (buoyant) and persistent i.e. fishing boats discard old nets, and lines, which are usually made of plastic. Ballast waters are used in containers to keep the ship balance when the ship is empty of cargos. It is used to control the stability and draught and to modify the ship centre of gravity in relation to the cargo and the difference in weight distribution. The water ballast is usually discharge in to the water and replaced with freight. These ballast waters are mixed and contaminated with oil and possibly with other wastes in the tank. The discharge is therefore water pollution to the waters. Oil cargo vessel accidents are one of the most heart breaing problems of maritime transport activities due to oil spills Oil.
Road transportation is usually not a factor to consider when it comes to water pollution, but issues like road accidents and vehicle exhaust are both sources of oil and hazardous chemicals which run off the road into surface and ground by rain waters, into seas and ocean these are all direct and indirect causes of water pollution.
Noise pollution refers to the unpleasant irregular and chaotic sounds. It traumatize the hearing organ, it's unpleasant and disturbing character are serious threat to the quality of life, noise contributes to such health problems that affects the quality of life such as stress, sleep disturbances, cardio - vascular disease, and hearing loss. Surveys show that noise pollution affects people more directly than any other form of pollution. German experience has found that as people become annoyed about noise, they become aware of other environmental pollution problems as well (Kürerp. 493). And also long term exposure to noise levels greater than 75db seriously hampers hearing and has a significant discomfort to human physical and psychological existence.
Trucking: there is different size of trucks causing noise pollution at different scale. Trucks are considered to be a more significant source of noise than other modes of freight transport.
Rail: rail freight movement is a lesser noise pollutant when compared to trucks.
Air Transport: people living or working around airports suffer from major nuisance from the noise pollution generated during landing and taking off of planes, traffic congestion and other dangers of air crashes. It is a major nuisance to those who live or work in the vicinity of airport.
All the activities from different mode of freight transportation and passenger transport industry have lead to the emission of several million tons of gases into the atmosphere every year. Gasses, dusts from contact from road and tire cohesion and ash like substances from different modes of transport like lead (Pb), carbon monoxide (CO), carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), chlorofluorocarbons (CFCs), perfluorocarbons (PFCs), silicon tetraflouride (SF6), nitrogen oxides (NOx),benzene and volatile components (BTX), heavy metals (zinc, chrome, copper and cadmium) and particulate matters (ash, dust) as lead to climatic change when mix in the cloud waters.
Land take and soil quality
The construction of transportation infrastructures and facilities has an impact on the layer of urban landscape. The construction of roads, airport, and rail ways take up significant land space in the environment, in most cases displacing people of their habitat and farm land.
Airport takes up space, and discourages people from living in areas close to the airport.
Water transport displaces some organism from their habitat, and also dredging is bad for the water and soil organism. Dredging causes soil around the water to be contaminated.
Green Movement of Freight
The environmental effect of freight movement has caused a lot of harm and changes in the environmental system. Due to all these impacts, some companies have come together separately and some as a group working towards reducing the effects of freight movement on the environment. There lots of freight movement lacking fast and efficient transport underpinning the Global economy. Globally road transport is the most proffered mode of freight movement but rising traffic volumes cause congestion, pollution and extra costs. There are alternatives route which make more economic and environmental sense like rail, sea and inland waterways. Alternative forms of transport are greener, cleaner and even cheaper over time, but most manufacturers and producers and hauliers are not really interested in investing in change. Here are some of the companies investing in alternative green, cleaner and even sometimes cheaper mode of transport:-
Damco: is one of the world's leading company in rendering freight movement and supply chain management services. For more than 30 years Damco have been providing her customers all over the world with transportation and logistics solution. In the process of Damco working on her supply chain expertise extensively, Damco recognize and implements solutions for reducing carbon emissions in your supply chain. The extra advantages of conducting a Supply Chain Carbon Check helps the company have a lower carbon emission level based on best practises within the monitored period.
The Supply Chain Carbon Check (SCCC): aides companies in assessing and reducing their supply chain carbon footprint. Damco conducts Supply Chain Carbon Check projects globally for many global companies from various industries. Through increased supply chain efficiency, the emission of CO2 can be reduced with the process of SCCC projects. It also reduces the cost of supply chain. Powered by the partnership with First Climate, Damco offers its clients the opportunity to offset their unavoidable CO2 emissions.
Damco's Supply Chain Carbon Dashboard: is a tool use in able to reporting of carbon emissions on a periodic basis. Through the companies new Supply Chain Carbon Dashboard platform, Damco delivers a unique value proposition, assisting other companies in understanding their overall supply chain carbon emissions. By zeroing in on a particular level of emission levels, the Carbon Dashboard immediately allows companies to indentify "carbon hotspots'' in their supply chain. This will help such companies to determine how and what to do to reduce and minimize their carbon footprint, in response to the effects of carbon emission on the climatic change.
Damco's Packaging Optimization Service: this service helps in reducing environmental impact of freight movement, by implementing packages that suit company's end - to end needs, reducing the number of trucks or containers needed. Damco as a company is able to achieve this new service by partnering with Supply Chain Optimizers (SCO) to deliver a unique Packaging Optimization service.
Norbert-Dentressangle: is a freight forwarding company that operates in over 50 countries and across 3 continents. Norbert - Dentressangle offers experienced and committed freight forwarding expertise and also work in cooperation with network of specialist partners and channel the transports of goods and services throughout the world using road, sea and air. Norbert Dentessangle provides transport and logistic network solutions that extends across Europe.
In Norbert Dentressangle commitment in reducing the company's environmental impact on society, they have taken some measures and obtained accreditation of relevant environmental organisation body like ISO 14001 environmental certification for all the company's sites in Europe. The company is the leading owners of Europe's No.1 HGV fleet, in reducing the green house gas emissions from trucks and other transport modes by the company, the company has kept a firm commitment and also believed trucks are not the problem, but form part of the solution.
In showing their commitment the company developed some strategies in reducing the impact of their activities on the environment:
The company's first strategy was to obtain ISO 14001 environmental certification for all their European sites. The company's sites meet up with stringent environmental management standards, these standards includes several dimensions, like complaisance with regulations, monitoring and measuring energy/water consumption, discards and waste all under the ISO 14001.
The company carries out measurement of their consumption of natural and energy resources and reporting on waste treatment.
Out of the company's 192 logistic sites, 79 are ISO certified.
Truck/ Driving (Eco - Driving)
Hiring and training of responsible drivers in economical driving also know has "eco-driving''. Efficient driving that reduces fuel consumption over the same distance of freight movement. In the past decades engine technology has improved, with many drivers not adapting wit changes. Ecodriving offers lots of benefits, including GHG emissions reductions, fuel cost savings, as well as better safety.
Working closely with their customers the company is able to optimise their transport plans and loading of associated vehicles. Also Norbert Dentressangle carries out R&D projects in partnership with truck manufacturers, with primary objective on creating alternative technologies (innovation) to the diesel engine.
The company renews her fleets of vehicle (85% of the company's fleets meets the Euro IV and Euro V standards) periodically to meet EU emission standards. Innovations like: increasing the level of aerodynamics (introduction of deflectors in roofing /lateral,feul efficient standard equipments in all vehicles average fuel efficiency gain of 1.5 l/100 km; "tear drop" style aerodynamic bodywork which has been tested in the UK: with proven estimated fuel efficiency gain of 5% estimate).
Optimising transmission systems: purchases of automatic gearboxes which improve fuel efficiency in driving standard combined with standard equipment in all vehicles: a tested and proven statistics of an average fuel efficiency gain of 1.5 l/100 km).
Investing in trucks by purchasing parts reducing rolling resistance (newly produced low-energy tyres by Michelin Energy)
The company procures fuel economy device like Stop-Start technology, this device stops the engine from working when the trucks come to a stop, is made available as standard in all trailers purchased from major manufacturers, this new development as recorded an estimated fuel saving of 3% - 5%.
The company provides alternative multimodal transport solutions where possible. Either combining rail/sea/river/road in different channels.
The company reduces carbon emission by carrying out proper packaging of freight goods, reducing the number of trucks and containers needed. Improved transport capacity (ambient and temperature controlled double-deck trailers).
Testing alternative technologies to the diesel engine like hybrid technology innovation, being tested on four different prototype trailers in 2011: the following recordings and observations were made: 20% fuel saving efficiency, reduction of about 30% in pollutant emissions, less noise pollution.
In the effort of measuring carbon emissions, given the fact that in 2013 the European regulations will make it compulsory for all companies registered to measure and publish their carbon emissions. Norbert Dentressangle with the help of its internal team has gone a step further in designing and developing a carbon calculator reliable in measuring emissions produced by the company and her customers during transport activities. The calculator analyse different types of information like mileage, diesel consumption, load weight, content in order to produce to indicators which are: Gross CO2 emissions and CO2 emissions/ tonne per kilometre
DPS international is a global logistic company that has grown to become one of the most advance vehicle routing and scheduling systems service providers in the world. The company is the leading developer of desktop solutions by creating a state-of-the-art desktop solution called (LogiX) and also recently introduced their newly produced web based pay-as-you-go routing and scheduling system, logixcentral. In the effort of the company providing its clients with fleet efficiency, DPS has now developed a module to ensure her client are able to measure their fleet's carbon emissions and the impact of introducing new and efficient fuel and emission saving vehicle types, and reducing mileage and numbers of vehicles. For several years the company's customers have been able to reduce their carbon emissions by using the state-of -the - art DPS LogiX routing and scheduling software to optimise their vehicle usage. In 2006, from published results, DPS customers were able to save around, 15,000 tonnes of carbon by using LogiX software.
DPS Saving Calculator: With the aide of this device companies can estimate how much carbon emissions they are contributing to pollution, and how they could reduce both cost of operations and in relations to carbon emissions by using the DPS calculator. DPS calculator could be downloaded from the company's website under the Financial and Carbon Savings (FACS) link.
In show of DPS commitment to reducing green house gas emissions, the Managing Director (MD) Paul Palmer made note in his statement in 3rd April, 2007 for DPS UK to become carbon neutral. The company have worked closely with Climate Care organisation to offset all carbon emissions generated over the past years from our energy use within the company's office and also from the business travel.
Due to the use of LogiXcentral over the web, DPS has seen some of her customers reduce their fleets of vehicles from at least (20 to 30 vehicles) to as few as ten vehicles. This reduction in vehicles as offset the cost of software licence (up to £50,000), computer hardware (laptops and desktop); maintenance agreement (monthly maintenance and upgrades); internal IT support and upgrades (web site maintenance and upgrades).
Basically the major effects of transportation on the environment generally are freight movements. Road contributes a major share of pollutants relatively to other modes. Although air transport has some contradiction with passenger transportation, most goods moved by air is done on commercial flights. The increasing effects of global warming, has been a major wake up - call for several organisation in reducing the factors causing global warming. Freight movement is major contributor, with proper awareness and constant innovative solutions the world can remain a better place.
Vedantham, Anu and Michael Oppenheimer (1994), Aircraft Emissions and the Global Atmosphere:Long-term Scenarios. (New York: Environmental Defense Fund, 1994)
Snape, D.M. and M.T. Metcalfe (1991), "Emissions from Aircraft: Standards and Potential forImprovement" In Kroon et al, eds.
JOY HECHT,1997. OECD "The environment Effect of Freight Movement''. Available from: http://www.oecd.org/environment/environmentandtrade/2386636.pdf [Assessed 12th December, 2012].
JEAN P, CLAUDE C and BRAIN S (2009). "The Geography of Transport System''New York: Routledge, 352 pages. [Online]. Available from: http://people.hofstra.edu/geotrans/eng/ch8en/conc8en/ch8c1en.html
[ Assessed 12th December 2012].
MHW Magazine, 2007. "Silver Jubilee Logistics Company Offers Green Logistics Solution''. Available from: http://www.mhwmagazine.co.uk/NewsArchive/2007/April/Silver_Jubilee_Logistics_Company_Offers_Green_Logistics_Solution-78.html [Assessed 15th December 2012].
DPS INTERNATIONAL, 2011. Available from: http://www.dps-int.com/index.php?ref=topNav [Assessed 18th December 2012].
DAMCO, 2010. "Green Logistics''. Available from: http://www.damco.com/Service/GreenLogistics.aspx [Assessed 17th December 2012].
NORBERT DENTRESSANGLE, Available from: http://www.norbert-dentressangle.co.uk/Commitments/Environment [Assessed 18th December 2012].
DIESELNET, "Emission Standards''. Available from: http://www.dieselnet.com/standards/eu/hd.php [Assessed 18th December 2012].
ECOWILL, 2011. " What is Ecodriving?''. Available from: http://www.ecodrive.org/en/what_is_ecodriving-/ [Assessed 20th December 2012].
EYE FOR TRANSPORT, 2007. " Green Logistics Forum" Press releases. Available from: http://www.greenlogisticsforum.com/resources_press.shtml [Assessed 22nd December 2012].
Fourth Party Logistic Operator (4PL)
What is a Fourth Party Logistics operator (4PL)
Fourth part logistics companies serve as consultants that integrate the relationship between the principal company and transportation companies and one or more third party logistics companies to make sure all operations are running well. 4PLs render several levels of responsibility, which varies from advice on choosing the best companies, right up to the day-to-day management of essential logistical tasks being performed for the principal companies.
Fourth Party Logistics (4PLs) was born originally in the 1990s, by the consulting firm Accenture. The definition of a 4PLs as since then evolved from being a consulting firm who integrates and mange company's logistics resources and providers, including 3PLs and transportation companies.
A 4PLs don't own the assets use in the logistics process unlike 3PLs. The heart of the fourth-party logistics concept is the presence of that integrator and the sense of strategy involved. It is a Business Processing Outsourcing (BPO) provider. A 4PL brings different perspectives and value which includes knowledge, experience and technology existing in the operational systems of the customers, and can and will work with the firm to reengineer it into an improved or new process. A 4PL is neutral and offers managerial responsibilities for the logistics process, regardless of what carriers, forwarders, or warehouses are owned or used by the primary company. The 4PL will even manage existing 3PLs either one or more, already been used by the customer. Historical relationship with the customer and existing 3PL means a better understanding of the complexity of the customer's requirements, this allows for a viable solutions and to have customer satisfaction and retention policies.
Some 3PLs companies also upgrade their expertise to render consultancy services like a 4PL. Some 3PLs have a 4PL division.
Advantages of outsourcing a transport operation to a fourth part Logistics operator
A good 4PL company should have a state-of-the-art technology that ensures their customer's high demands are met. It should be able to render solutions that can be customized to each client's requirement, and also be able to deliver maximised availability of the right product at minimum inventory holding cost.
These are the advantages/benefits of an efficient collaborative 4PL approach to logistics solutions:
Debt and Unique Expertise: when logistics process becomes complex, increasingly expensive and non - core competency to shed.
The verse availability of resources at 4PL disposal makes it have capabilities to identify the most effective ideas and do further analysis on them to see how effective they are to their customers.
4PLs have more recourses and contacts (3PLs, IT vendors and transport companies) available for their customers to choose from. It retains cooperate supply chain network in the company's data.
4PLs addresses operational failures of existing 3PL companies by creating completely new structure for their customers.
4PLs carries out a single point of contact to mange all areas of their customer's supply chain network to check for failures from existing or previous 3PLs.
Normalize data: due to difference in reporting formats and different metrics from multiple relationships, 4PL is able to align these different data (normalize data) and makes it easy and quickly to compare data across the supply chain and across the company. For instance 4PLs knits together different 3PLs into a total, integrated solution. 4PLs deploy assets as efficiently as possible by considering both inbound and outbound sectors of supply chain logistics to leverage synergisms.
Analytic capability: 4PLs does this by managing supply chain on a more concentration on data intensive basis. For instance, the curiosity of whether deliveries reached their final destination safely and on time is further analysed to also determine whether distribution stations have the right inventory and right levels of inventory.
Optimisation of supply chain: this the ability of the 4PL to get a great rate on transport cost from one point to the other. 4PL do more comprehensive research in the process of goods being moved from one point to the other, paving way for an environment in which encourages the supply chain to become a competitive advantage.
4PLs are in a better position to develop meaningful metrics in a common format making use of terms and conditions that are standardized across the company and its supply chain. The ability of 4PLs to deliver raw materials and finished goods at the right place and right time, gives their customers a competitive advantage.
Customers working with a top 4PL have the advantage of getting exposed to best practices and encourages innovation through the supply chain. 4PLS work with variety of companies both home and abroad, so they have a wide contacts and knowledge. 4PLs are welled positioned to see different approaches to problems and issues, in the process they assimilate the most effective approaches into their practices that could later be used on their customers.
Sharing and Reducing Risks: the relationship between 4PLs and its customers brings about the sharing and reduction of risks. The 4PL company transfers, avoids, and also eliminates risks because they are specialized providers of logistic solutions. They are able to have first hand experience to assess uncertainties and potential catastrophes affecting logistics operations. The 4PL also have sophisticated and sufficient equipment and facilities to run logistics and supply chain process efficiently. The 4PL don't want to fail, in doing so they share risk with their customers.
Improves Accountability: most companies find it hard to track money spent on transport activities, they can't come up with a presentation that states the consolidated report of detail spending or the reasons for it.
4PLs drive efficiency: by improving not just on transportation efficiency, but also on packaging engineering and products engineering. It makes use of its collaborative environment to pull together both packaging engineers and production engineers to optimize the sectors that has direct or indirect effect on the supply chain. For instance, freight forwarders deal with chartered weights and actual weights, so the main aim is to minimize the difference between charted and actual weights and in the process get better unit prices.
Changing the structure of the network: this a usual approach taken by 4PLs, by implementing changes to optimize the supply chain, changes/ additional warehouses and distribution centre location, staging and inter or multi modal transportation. These are a one - time savings, but are necessary for effective performance. It is very essential to look at transportation modes; fluctuation in factors affecting transport modes like economics, disaster, and pollution e.t.c. for instance, fluctuation in economics may cause some changes to modes of shipment. The decision on what combination of transport modes is necessary to get a better logistics solution.
4PLs provides its customers Improved availability of raw materials, increased customer satisfaction rating, and increased sales and profit by exposing its customers to its additional clients and other divisions.
Effective consultancy and solutions provided by 4PLs leads to reductions in lead-times in exportation from export country to import country and vice - versa.
Improved load planning through consolidation options delivering optimised container fills
4PLs creates the opportunity of greater collaboration and improved relationships with multiple partners which shows no - one knows it all. No company is perfect in every area and location of operations.
A 4PL over sees all financial activities of 3PLs, in case of financial failure 4PLs releases capital through proper selling of logistics assets to the 4PL organisation or on levelled headed free market.
Disadvantages of outsourcing a transport operation to a fourth part Logistics operator
Although 4PLs have lots of benefits and logistic solutions to their customers, there are also some negative aspects of a Fourth Party logistics to the customers and the company. Some of these disadvantages are listed below:
Lost of Control over the Supply Chain: as a company outsource its supply chain to a 4PL a bit of the company's control is lost. The company takes the risk of depending on the fourth party logistics provider and losses the control over the logistics and service process when the logistics operations are subcontracted to logistic providers like 4PLs. if the logistic operations goes like an error or mistake, the company will be affected directly but is unable to fix the problem itself due to the fact that such activities have been outsourced to a 4PL.
Cost Awareness: outsourcing to 4PLs is quite capital intensive, and over the course of the logistic process the cost increases sometimes. These existing hidden costs should be considered and compared with the benefits and cost reductions before starting to outsource (Wang and Regan,2003; Barthelemy, 2001).
Lack of Improvement and Innovative Ability: some 4PLs are cost driven; they concentrate more on the cost than the innovation of logistics solutions. Thus, the fourth party logistics is most likely to increase the amount of cost rather than develop the total logistics operations.
Human Resources: this has to do with the staff and management of customers hiring 4PLs, they seems not to be in good terms with 4PL outsourcing, like they are taken their jobs away from them.
Profit on profit: some 3PLs have a division doing the job of a 4PL, and they both do the same logistics operations sometimes. In the process of doing the same task under two different parties makes profit declaration really hard.
From the discussion above, there are more advantages of a 4PL than there are of its disadvantages. The existence of a 4PL is largely due to the failure of 3PLs in some critical areas of supply chain management. As a result 4PLs has become alternative for BPO logistics, providing valuable services like integration across multiple enterprises and providing accountability. 4PLs uses three fundamental elements described as process, people and technology. After all, a 4PL is a major player in the decision making process of the supply chain management of its customers. A 4PL adapts to different needs of customers by customizing solutions to the needs of its customers. All is not smooth for a Fourth Party Logistics Company (4PL), there are still some major set back like the cost of hiring a 4PLs company is high. At the end, the money spent is worth it, because customers get to save more money in the hands of a 4pl.