The strategic development of third party logistics providers in the Netherlands

The transport- and logistics sector faces low margins and continuing price pressure. As was evident from the surveys conducted by TLN (2011), there is a difference in profitability between logistics service providers and transportation companies. This difference in profitability is presumably explained by the fact that logistics services providers offer a more differentiated service. This insight led to the following research question: ‘’How do third part logistics providers in the Netherlands develop their business?’’ The purpose of this research was to study how TPL providers in the Netherlands differentiate their business to be more than a commodity service for their customers. Because becoming of more strategic importance for your customer presumably entails a higher profitability for the TPL provider, it is expected that TPL providers search for multiple ways to do so. In essence, this study is about TPL providers’ relationship with their customers and the development and strengthening of these relationships. Following from this, this research is about Dutch TPL providers expanding their services into less traditional logistics activities and further diversifying the services offered: TPL providers creating new (international) business for themselves. After studying business logistics and supply chain management literature, various sub questions arose. These sub questions gave answer to the research question, all from a different angle. To give answer to the various sub-questions discussed within the theoretical framework, an online survey was conducted. A questionnaire was developed, consisting of fifteen statements and twenty-eight closed questions. TLN was very helpful in bringing this research under the attention of the appropriate (potential) respondents. Besides through TLN, I also raised awareness about this research by LinkedIn. All these efforts finally resulted in twenty-seven responses from Dutch TPL providers. It can be concluded that TPL providers are starting to become of more strategic importance for their customers, but there is still much to be gained in this area. Another possibility to develop business is by further internationalizing and Dutch TPL providers are planning to do so within Europe. It was also found that an acknowledged way of diversifying services, attracting and retaining (stronger) customer relationships and thus making your service less commoditized is by being an environmentally aware TPL provider. Another way of becoming of more strategic importance is by making client specific investments: as is done by three-quarter of Dutch TPL providers. The value added services offered by Dutch TPL providers contain a large spectrum of services, of which some services are not related to traditional logistics. On average, one fifth of all turnover is derived from value added logistics; thereby TPL providers prove they can develop new business for themselves. But there is more proof of this: focusing more on supply chain management is another way of getting hold of a larger part of the supply chain, thereby diversifying the providers’ service offerings. Although the majority of TPL providers see offering supply chain management as a major opportunity for them, most notice that customers are too focused on short term price levels and lowering costs of logistics. Finishing with strategic positioning, although in the current situation most TPL providers are focused on their general problem solving capabilities, it is the trend to wanting to become a more dedicated service provider: thereby again aiming at becoming of more strategic importance for the customer and taking benefit from this situation.