The unique 4PL model
Typically, in a traditional logistics model, a shipper engages individual carriers for each mode of transportation required to meet its unique distribution needs. As we’ve outlined elsewhere, there are a myriad of reasons why a 4PL may be a superior solution.
Rather than take the ‘one size fits all’ approach, a tech-enabled fourth party logistics provider curates a bespoke solution for each customer, bringing in a suite of carriers to provide the optimal solution for each of the customer’s diverse requirements. We then manage that solution ongoing, analysing data to identify areas for improvement and involving a dedicated team to ensure the smooth-running of the operation day to day.
Although we add clear tangible value, we do not charge a stand-alone service fee. Customers only pay the costs of freight, which are highly competitive with the market, and from a more optimal mix of carriers. We partner with our customers to help them carve out real commercial advantage.
So, how do we do it?
An orchestrated solution
In essence, a 4PL sits ‘across’ 3PLs and 2PLs, providing an overarching control-tower view, reviewing the data coming in from various sources to get visibility on potential or emerging issues. Elsewhere in business such a model might incur a service fee.
For instance, you might outsource your enterprise’s IT service requirements, paying a fee for network support, infrastructure and security on top of which you pay an implementation fee for the upfront setup work. It’s the same in your personal life: if you hire a tradesperson, not only would you pay for the materials, but you would also pay a fee for labour to get the job done.
However, at efm it’s different.
Unparalleled carrier partners
When we curate a tailored solution specific to our customers’ needs, we draw on our longstanding relationships with nearly 200 trusted carrier partners. They provide full-truck load, less-than-truckload, intermodal, priority, parcel and ocean services.
Our size and scale as the largest 4PL in Australia and New Zealand affords us enormous purchasing power, which allows us to negotiate favourable rates with carriers on behalf of our customers. Rather than charge our customers an additional implementation fee, we bundle up this procured rate with all of our costs of delivering the solution - the IT licence, implementation costs, ongoing management costs and so on – to arrive at a contract rate for the customer. The customer only pays the freight costs at this contract rate.
Because of our economies of scale, the contract rate is competitive with the rate a customer would procure directly from a carrier. In fact, it is often even less than what they would be able to access directly.
In addition to this value, we create efficiency and enable cost savings over the long-term. For example, our proprietary technology software, OneFlo, will optimise the service selection to ensure the customer’s team chooses the optimal carrier each time to avoid costs spiking unnecessarily.
From a people perspective, our team collects and analyses the data from a customer’s supply chain to continually look for, find and implement opportunities to improve efficiency and find cost savings. Some of the initiatives we have implemented include automation of the consigning process through integration, consolidated branch transfers, introducing specialist carriers for certain regions and enforcing least-cost routing controls.
The result is an overall less costly, more efficient logistics solution completely curated for, and managed on behalf of, customers.
The model does not just create a positive outcome for the customer and efm; carriers stand to benefit from this arrangement as well.
As an intermediary, efm is in a unique position to see the supply chain from both sides. We can provide carriers useful insights into their actual and potential customer base. When we provide our customers with a suite of suitable carriers it often leads to carriers getting work that they might not otherwise be considered for.
There’s also a benefit of risk mitigation for efm’s customers, which can select from a list of pre-vetted carriers because we’ve already done the due diligence checks on their reliability. In this context, efm operates like an extension of the carrier’s sales team; customers simply use OneFlo to input the requirements of the load and then consign it to a carrier based on relevant parameters.
Parcels, satchels, and pallets all have particular handling requirements and need different types of warehouse infrastructure. Partnering with efm takes the hassle out of the customer’s decision-making process by easily and quickly matching their freight profile to the right carrier. Carriers also increase their productivity because they can get volumes up via load consolidation.
When starting the conversation with a prospective customer, we will engage in a comprehensive audit of their existing logistics solution and determine whether we can find savings for that business. Unlike a consulting firm, we do not charge for this service, because we are about long-term relationships. We have a high success rate and customer longevity because they see the value we can provide. We know that if we win the business, we will see the return in time.
Our modus operandi is to put square pegs in square holes and the same is true in regard to our fit with customers. If we cannot add value to their business, then we will gladly walk away from the table and we will absorb the costs incurred to date.
Too big not to care
Since our inception in 2001, we have grown to become the largest 4PL in Australia and New Zealand. We have achieved this feat by delivering our customers an unparalleled logistics solution. It’s what we call our promise of no better experience.
Our long-lasting carrier relationships, sophisticated proprietary technology and dedicated, passionate people have seen us achieve great success because we have achieved success for our customers. This model continues to serve our customers well as our growing size and scale gives us added ability to deliver further unparalleled outcomes.
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