The logistics service provider as an integrator of supply chain. Evidences from an emerging market
- Publication type: Journal article
- Journal: European Review of Service Economics and Management Revue européenne d’économie et management des services
2021 – 2, n° 12. varia - Authors: Mir (Amr), Lazaar (Sara), Balambo (Mohammed Amine)
- Pages: 69 to 91
- Journal: European Review of Service Economics and Management
The logistics service provider
as an integrator of supply chain
Evidences from an emerging market
Amr Mira
Sara Lazaarb
Mohammed Amine Balamboc
aESCA School of Management, Morocco
bCadi Ayyad University, Morocco
cIbn Tofaïl University, Morocco
Introduction
The rated logistics service providers (LSPs) have become true partners of manufacturers and distributors, just like all the players who participate directly in the collective creation of value within a supply chain. In view of the growing importance attributed to new integrated logistics solutions, LSPs are acquiring an increasingly broad scope of intervention to carry out logistics operations, coordinate activities and inter-organizational processes, and pool logistics resources to optimize physical flows along the supply chain, thanks to their in-depth mastery of information technology and the development of cross-functional skills related to all supply chain management (SCM) professions. Since the 1980s, the LSP business has been constantly evolving to meet the needs of companies that are constantly seeking to make the most of logistics by reducing costs and improving service levels. As part of the annual surveys on the state of the art of logistics outsourcing, the results of 70the 22nd study reveal that this practice continues to grow by further consolidating the positive relationships between customers and third-party logistics (rated 3PL or TPL), leading to the emergence of innovative logistics solutions that provide competitive advantages to partners1.
Omnipresent in the management of flows (physical and information) from suppliers’ factories to retail outlets, including assembly units, the most efficient LSPs now cover a wide range of activities on behalf of their shipper customers (manufacturers and/or distributors) (Roveillo et al., 2012). It is this phenomenon that academic and professional research are highlighting, especially in the context of countries that have successfully completed their logistics transition. The purpose of this research is to analyze the roles played by LSPs in the supply chain, in a context where the rate of logistics outsourcing is very low in comparison with logistics outsourcing rates in industrialized countries, which range between 70% and 90%2. In Morocco, according to the AMDL3, the outsourcing rate of logistics activities is still mediocre. Indeed, in terms of warehousing activities the outsourcing rate does not exceed 14% while on the transport activity the outsourcing rate is 75%.
In this unfavorable context for the development of the market for the disposal of logistics services in Morocco, the production of research work that characterizes the professions of logistics service provision in Morocco are experiencing a real shortage. The only ones, to our knowledge, who have published work on LSPs in Morocco in recognized scientific journals are authors who are interested in the links between corporate social responsibility, sustainable development and LSPs (Elbaz et al., 2014), or authors who study the forms and evolution of outsourcing of logistics activities within the framework of contractual relations between shippers and LSPs (Hdidou and Moncef, 2018; Mir and Balambo, 2019). Taking these elements into account, based on a literature review, this contribution illustrates in a first step the different roles played by LSPs in supply chains. Some authors consider them as integrated actors in the supply chain, others set them up as integrators. In a second step, the 71main results of an empirical study conducted among different categories of LSPs in Morocco are presented and discussed4.
1. Theoretical framework
1.1. The integration of the LSP in the supply chain
Since the term SCMwas first used, consultants and authors have focused primarily on the connectivity of logistics with internal company functions and external partners to better manage flows and resources (Houlihan, 1987; Stevens 1989; Oliver and Webber, 1992). Although researchers now use the term SCM, they realize that it does not clearly describe the relationships between the partners involved in the various links of the supply chain. Nevertheless, we note that the supply chain research community has adopted this famous definition of the supply chain: “a set of three or more entities (organizations or individuals) directly involved in the upstream and downstream flows of products, services, finance and/or information” (Mentzer et al., 2001). The involvement of the actors in the supply chain aims at delivering the final customer in the best conditions of time, quality and costs. The optimization of these three criteria requires an integration of physical and information flows along the supply chain to achieve better performance, not at the level of a single actor but at the level of all supply chain partners.
However, supply chain integration varies at several levels (Stevens, 1989; Fabbe-Costes and Jahre, 2008), the authors point out that integration can be dyadic, triadic or extended to a network of actors. Mentzer et al. (2001) note that LSPs are among the actors in the supply chain. They initially specialized in traditional trades only, given the constraints of skills availability and logistical resources. Although rare, a few advanced LSPs offer, in addition to traditional activities, other logistics services with high added value (Van Laarhoven and Sharman, 1994): outsourced activities and services include transportation, warehousing, inventory, 72information systems, process reengineering, and supply chain design. The first three activities are the most commonly outsourced (Berglund et al., 1999), while other services are entrusted to LSPs only occasionally, depending on the specific needs of some clients who request expertise from SCMconsultants. From this point of view, a better understanding of logistics diversity is essential for the improvement of service science (Zeroual and Blanquart, 2017).
The core business of today’s LSPs is crystallized in their ability to pool logistics means and resources in order to carry out the logistics activities of several clients with a promise to generate significant economies of scale and scope that can contribute to improving the performance of the supply chain of all partners. As industrial activities associated with changes in distribution patterns environment, clients are increasingly involving LSPs in the supply chain by asking them to offer new high value-added logistics solutions in line with new market requirements. It is within this context that local authorities are broadening their offer to include innovative and high-added services (Fulconis et al., 2016). LaLonde and Masters (1994) point out that the first value-added services offered by LSPs include, for example, computerized data exchange, information sharing to track shipments, intermodal transportation services, container leasing, and maritime brokerage. Thereafter, the services are extended to other value-added activities. The progressive integration of the LSP into the logistics chain has been part of a process of mutation from a simple carrier (Berglund et al., 1999) to an expert proposing more complex logistics solutions (Berglund et al., 1999; Delfmann et al., 2002; Erhel and Calvi, 2018). In view of the different positioning and the diversity of the proposed offers, some authors classify LSPs into several categories.
Thus, according to researchers interested in the concept of supply chain integration, LSPs are classified according to the extent to which they are integrated into the supply chain (Mentzer et al., 2001; Fabbe-Costes and Roussat, 2011). LSPs can also be distinguished according to the nature of the activity proposed (transport, warehousing), the logistics means and resources they possess (trucks, warehouses, logistics platforms), their network organization, or their skills, particularly in consulting. Figure 1 illustrates the logistics activities and services proposed by the LSPs and identified by Aguezzoul and Paché (2020). 73These activities and logistics services lead to four types of LSPs. The first category concerns LSPs offering transport activities such as parcel delivery, pallet delivery, road groupage, international delivery, freight forwarding (Erhel and Calvi, 2018). The second category includes the offer of basic and value-added warehousing. The third category concerns logistics integrators (Roveillo et al., 2012).
Fig. 1 – Categorization of logistics services (Aguezzoul and Paché, 2020).
In light of the literature, we have shown that LSPs have gradually obtruded themselves in the supply chain with a view to establish a privileged position as a strategic partner. These service providers are increasingly integrated into global and complex supply chains (Aguezzoul and Paché, 2020). In general, the mutation of the LSP from simple carriers to logistics experts with varied skills, or even real industrialists in certain specific sectors, has paved the way for the development of a literature around the TPL/3PL and 4PL providers. These service providers are considered as real logistics integrators. Berglund et al. (1999) define 3PLs as “LSPs performing traditional activities on behalf of a customer such as managing and carrying out transport and storage. In addition, other activities can be proposed, such as inventory management, monitoring and control of information flows, carrying out value-added activities such as assembly, or even managing the entire supply chain”. As for the 4PL providers, “they are chain integrators who will assemble and manage the resources, capacities and technologies of their own organization and 74those of complementary SSPs in order to deliver an integrated solution for the customer’s supply chain” (Hiesse, 2009).
1.2. The integration of the supply chain by the LSP
Supply chain integration is of strategic and operational importance, but the role of the LSP in supply chain integration is not entirely clear (Fabbe-Costes and Roussat, 2011). Before considering the role of LSP in supply chain integration, it is important to first identify the layers that enable successful supply chain integration (Fabbe-Costes and Jahre, 2008): (1) integration of physical, information and financial flows; (2) integration of processes and activities; (3) integration of technologies and systems; and (4) integration of players. From a flow-based perspective, the objective of SCM isto synchronize customer needs and the flow of materials from suppliers in order to achieve a balance between objectives – high service level, minimum stocks and reduction of unit costs – often considered to be contradictory (Stevens, 1989). From a process- and technology-driven perspective, SCMfocuses on the use of supplier-managed processes, technologies and capabilities to facilitate the integration of the players. Finally, from an actor-oriented perspective, SCMis perceived as a global approach integrating a network of actors from the first suppliers to the final customers (Cooper and Ellram, 1993). The three perspectives consider SCMas an integrative philosophy of firms with a focus on the customer. The theoretical contribution of SCMas a philosophy allows to understand how integration can contribute to create a competitive advantage (Ellram and Cooper, 2014).
Presented by some authors as logistics integrators (Roveillo et al., 2012), 3PL and 4PL providers develop integrated logistics solutions that rely mainly on the coordination of logistics processes and activities, the arrangement of logistics capabilities and resources and the control of information technology to enable the integration of the supply chain. According to Hertz and Alfredson (2003), two types of LSPs succeed in developing logistics solutions that contribute to supply chain integration:
–These are integrators such as Fedex, DHL, TNT who rely on information technology and an international network of logistics partners. They offer value-added services in the form of packages intended collectively for several customers, even 75–if the packages do not necessarily adapt to the specific needs and constraints of the customers.
–These are LSPs that develop integrated logistics solutions adapted to the specificities and business constraints of customers involved in a supply chain.
The integration of the supply chain by the LSP can result in the development of logistics solutions that do not take into account sector specificities (standard flows) or in the development of logistics solutions adapted to sector specificities (special flows). In both cases, 3PL providers are solicited to reinforce the integration of the supply chain by proposing integrated logistics solutions (Person and Virum, 2001). Such a deployment requires above all the mutual utilization of logistics resources of logistics resources, the creation of specific knowledge and the coordination of the activities of a portfolio of clients (Hertz and Alfredsson, 2003). It is important to recognize that the LSP is no longer a simple executor integrated into the supply chain, but a coordinator who takes full responsibility for managing the supply chain in a “win-win” logic with its clients (Saglietto and Rodrigues Viera, 2010). It is a key expert in logistics intermediation, and it deals with the configuration, coordination and control of supply chains (Erhel and Calvi, 2018). In this context, 3PL providers invest heavily in information technology.
As for 4PL providers, research shows that they bring non-assets logistics skills based on an expertise that allows them to become solution integrators (Makukha and Gray, 2004), able to coordinate flows, activities, processes and assemble the resources and capabilities of 3PL providers and traditional carriers to ultimately achieve the integration of all actors in the supply chain. Since LSPs are perceived by customers as flow coordinators, especially in an international context, the feedback reported by Asian researchers reveals that partners engaged in “closed circuits” collectively issue joint calls for tender to select 3PL providers who offer integrated logistics solutions (Hwang et al., 2016). In the Asian industrial context, firms in industrial clusters call upon the expertise of 4PL providers to manage and exploit collaborative resources in order to strengthen the competitiveness of firms operating in volatile international markets. Subramanian et al. (2016) point out that the use of 764PL providers improves “creativity and innovation capacity” and “supply chain flexibility” to strengthen the competitiveness of industrial clusters.
In their work adopting the network approach, Roveillo et al. (2012) note that some forward-thinking LSPs are now participating in the emergence of new logistics systems in which they could eventually play the role of pilot for networked companies. Through the control of inter-organizational information systems and the use of their experience in interface management, they would then not only have control of the entire logistics system specific to a networked company, but they could also easily position themselves at the interconnection of several networked companies with more or less related activities. This is what the authors call LSP connectivity. In the context of e-commerce, 4PL providers rely on the logistics resources of several 3PL providers and also carriers to coordinate activities from the order placed by customers in the marketplace to the delivery of items to the agreed location (home or the company’s physical store with click & collect), through the implementation of several activities and value-added services (receipt of items in the logistics platform, inventory management, order preparation, finishing, transport purchase, track & trace services, etc.). Rabinovich and Knemeyer (2006) carried out a study on the role of LSPs offering integrated logistics services to Internet vendors. The results reveal that sellers using e-commerce establish close relationships with LSPs that exploit significant logistics resources offered by a network of logistics operators to better to customer orders.
In view of these investigations, it is not too early to state that 3PL and 4PL providers are becoming logistics integrators today, especially in contexts marked by a strong industrialization and digitalization of the supply chain. In light of this literature review, we distinguish between LSPs that offer traditional logistics activities, whether or not associated with high value-added logistics services (Berglund et al., 1999), and LSPs that develop integrated logistics solutions that are more or less adapted to customer needs. These LSPs are referred to as logistics integrators (Hertz and Alfredson, 2003; Fabbe-Costes and Roussat, 2011; Roveillo et al., 2012). On the basis of this conceptual work, we formulate two propositions, which are divided into research sub-propositions. These Propositions will be confronted with our field of study, that of the market provision of logistics services in Morocco:
77– Proposition 1. LSPs offer traditional activities and/or value-added services; the wider the range of services on offer, the stronger the integration into supply chains.
Proposition 1.1. LSPs that only carry out transport activities are poorly integrated into supply chains.
Proposition 1.2. LSPs carrying out at least transport and warehousing activities are moderately integrated into the supply chains.
Proposition 1.3. As the LSPs carry out transport and warehousing activities, other value-added activities are strongly integrated into the supply chains.
– Proposition 2. The LSP solution developers are logistics integrators
Proposition 2.1. The LSP developers of common solutions are cross-functional logistics integrators.
Proposition 2.2. The LSP developers of adapted solutions are specific logistics integrators.
2. Field study
2.1. Research methodology
As the objective of the research is exploratory, the methodological approach adopted is qualitative in nature. It aims to enrich reflection “to see” (heuristic function) rather than “to prove” (Bardin, 2013). We wish to shed light on the position of the LSPs in terms of their levels of integration and the impact of their solutions on the transformation of supply chains. The qualitative methodology allows for a close relationship with the interviewees, a richness and comprehensiveness of data, a strong explanatory power of the processes, and a better discovery and exploration strategy (Miles and Huberman, 2005). For the identification of the LSPs that constitute our field of study, we draw inspiration from the literature review, which allowed us to target three LSP profiles: (1) Traditional carriers; (2) 3PL providers; and (3) 4PL providers.
78The target will include LSPs that operate in supply chains in several sectors with different logistics issues. We also include in our sample consultants who have already accompanied shippers in their logistics outsourcing strategy with LSPs and institutions working to modernize supply chains and develop the logistics services market in Morocco. To facilitate data collection in our empirical study, we followed three complementary phases:
– Phase 1. We presented ourselves in May 2019 at the International Transport and Logistics Exhibition for Africa which took place over three days. Our participation in this show allowed us to conduct short interviews (about 30 minutes) with 16 representatives of the actors exhibiting in the show and also to collect 32 offers of services from different LSP whether they are national or international carriers, actors of the courier, 3PL providers, consultants and integrators of technological solutions, developers of logistics platforms.
– Phase 2. Out of the 16 actors we met who agreed in principle to receive us in order to carry out in-depth interviews and whose objectives were explained beforehand, we were able to carry out 13 semi-directive interviews lasting around 50 minutes, including eight on site and five by telephone interview.
– Phase 3. We also contacted two consultants, a public institutional and a private institutional to shed light on the transformation of the logistics services market in Morocco in recent years.
A total of 33 interviews were conducted using an interview guide designed on the basis of the research proposals made. We also analyzed the content of 32 service offers from various exhibiting LSPs at Logismed 2019. All of this primary and secondary data was processed through a thematic content analysis with NVivo software.
2.2. Main results
The results of our study firstly present the levels of integration of certain LSPs in supply chains and secondly the level of integration of supply chains by certain forward-thinking LSPs. To report on the results of our study, we comment on the research proposals separately.
79P1. LSPs offer traditional activities and/or value-added services; the wider the range of services on offer, the stronger the integration in the supply chain.
In Morocco, the market for the provision of logistics services is characterized by a strong presence of traditional carriers but also by LSPs that offer various activities and logistics services. The offers of the LSP can be standard or customized, depending on customer demand and sector specificities. “Some shippers use traditional carriers for one-off operations, our approach is to develop partnerships to offer a tailor-made service” (LSP, top manager).
P1.1. The service providers carrying out only the activity of transport are weakly integrated in the logistic chains.
In order to be able to assess the degree of integration of carriers in the supply chain, it is first necessary to separate national transport from international transport. At the national level, all the interviewees referred to the constraint of the informal transport sector that negatively impacts the development of this activity in Morocco. “Informality is a major obstacle to the development of road freight transport. Indeed, companies operating in the food industry use informal transporters to benefit from low fares” (representative of a private institution). Indeed, informal transporters with outdated transport fleets dominate the market by imposing anticompetitive fares and deploying illegal practices (cash settlement). With the exception of a few professional transporters that offer fast courier services or specialized transport (temperature-controlled transport, bulk transport) to meet the specific needs of clients, the majority of LSPs are not interested in the road freight transport market within the national perimeter without integrating other value-added activities. “When it comes to refrigerated transport, we anticipate needs by investing in refrigerated trucks with the necessary approvals to meet our customers’ expectations” (LSP, transport manager).
At the international level, the LSPs offer the activity of international transport of goods, often in association with other services such as transit and customs formalities. The international transport of goods encompasses several offers, it can be an end-to-end full transport service or in shared transport, special transport requiring oversized equipment and also express transport with scheduled lines. As for modes of transport, most LSPs operating internationally have established partnerships and 80commercial ties with airlines in order to meet deadlines for rapid deliveries. In their service offers, some LSPs point out that they coordinate more than 20,000 crossings of the Strait of Gibraltar per year. Clearly, the provision of transport services, whether national or international, if carried out independently of other logistics activities and services, does not favor the integration of traditional carriers and LSPs into logistics chains. These are spot orders to meet one-off needs without the intention of committing to a lasting relationship between the partners.
P1.2. LSPs carrying out at least transport and warehousing activities are moderately integrated into the logistics chains.
In Morocco, the outsourcing rate is low. In 2016, it is around 14% for warehousing activities. Indeed, only a handful of Moroccan groups and multinationals operating mainly in the industrial sector and in mass distribution and recently in e-commerce outsource their logistics activities to LSPs. Within this framework, the LSPs develop both tailor-made offers according to the specific needs of certain customers as well as standard offers for several customers. In situ warehousing, for example, is a logistics service that meets the reciprocal constraints of customers and LSPs. This is a service that is carried out in the client’s own warehouses. The LSP simply provides its logistics expertise to ensure the execution of logistics activities and to integrate physical and information flows. “Given the particularity of this sector, our client offered us an in situ logistics solution, the logistics platform is owned by our client, we bring the expertise to execute the warehouse logistics operations” (LSP, top manager).
In some cases, LSPs exclusively dedicate their resources and logistical skills to meet the personalized needs of a single client. These needs require, for example, the leasing or development of a warehouse by the LSP with precise technical characteristics in terms of location, surface area and safety standards, or the mobilization of logistics equipment (fleet of trucks) for exclusive operation in order to deliver only to the client’s customers. In other cases, LSPs negotiate outsourcing contracts with several clients while pooling their logistics assets (platforms and warehouses, transport fleets, material handling equipment) and technological resources. While shared logistics certainly generates significant economies of scale and scope, it also has drawbacks related to poor adaptation to 81customer needs and reduced responsiveness, which sometimes lead to conflictual situations between the players in the logistics chain. “We have invested more than three million euros in this shared logistics base near the Tangier free zone. It manages the international flows of several customers with whom we are bound by contracts” (LSP, top manager).
Globally, LSPs that enter into long-term outsourcing contracts with their customers to perform at least transport and warehousing activities report that they are integrated into their customers’ supply chains. This integration can be explained by the expertise of LSPs in carrying out and optimizing logistics activities and also by their high level of proficiency of information systems, which have a significant impact on the logistics performance of their clients. “Our warehousing activities are managed by a WMS, we can even access the information hosted in our client’s databases, we access it but according to specific rules” (LSP, warehouse operations manager).
P1.3. In addition to transportation and warehousing activities, the LSPs carry out other value-added activities that are strongly integrated into the logistics chain.
Some logistics outsourcing contracts between LSPs and clients include other value-added services in addition to traditional transport and warehousing activities. These services are associated with transportation and warehousing activities. With respect to transportation activities, the LSPs are entrusted with the mission of analyzing transportation demand with a view to negotiating and setting up subcontracting contracts with traditional carriers. The LSPs also ensure the execution of the contracts. In certain specific businesses that require, for example, the transportation of hazardous materials, the LSPs also handle the regulatory aspect in order to ensure compliance with the laws in force. “Some of our customers require us to comply with the standards adopted by their head office. For example, we have to comply with carrier selection procedures, train our employees, and also re-parameterize our information systems for better connectivity” (LSP, logistics director).
With regard to warehousing, the most frequently quoted value-added logistics services provided by the LSPs are computerized inventory management and inventory taking, support for customers in their commercial operations by grouping products in the same packaging, carrying out assembly activities or delayed differentiation, quality 82control of upstream and downstream flows, and reverse logistics. In terms of information technology, the LSPs state that mastering IT solutions is essential for better coordination of logistics activities and to ensure traceability of flows along the supply chain. Consequently, the LSPs themselves call upon supply chainsolution integrators (GPS, WMS, TMS, EDI, BtoB portals) to acquire expertise in information technology. “By entrusting us with their logistics, our customers improve their service rate thanks to our IS expertise. We also support them in their commercial activities by carrying out kitting and co-packing operations” (LSP, top manager). In the light of these elements, LSPs that simultaneously perform traditional logistics activities and high value-added logistics services confirm that they are highly integrated into their customers’ supply chains.
P2. The LSP solution developers are logistics integrators.
In addition to the LSPs that carry out traditional logistics activities and value-added services, we also observe LSPs developing integrated logistics solutions, often with an international scope. These LSPs are part of international groups that interact with logistics partners forming global networks. Developers of integrated solutions mutualize logistics assets, that serves for managing physical and information flows, with the aim of collectively creating value. Some developers of integrated logistics solutions target a multitude of customers operating in heterogeneous sectors, while others target specific customers operating in industries with particular logistics challenges.
P2.1. The LSP developers of common solutions are cross-functional logistics integrators.
The LSP developers of transverse logistics solutions established in Morocco are integrators of physical and information flows between Morocco and the world. These LSP have a multi-sector expertise allowing them to propose common logistics solutions intended for several customers. To do so, they invest significantly in logistics assets such as:
–Logistics platforms, warehouses and bonded warehouses and clearance area, located near airports and seaports to facilitate the fluidity of import and export flows.
83–Modern vehicle fleets that range from 3.5 ton trucks to 24 ton trailers or oversized trailers. One LSP we met has in its asset base a clean aircraft with a capacity of 60 tons.
–Information technologies (geo-location, ERP, EDI) that guarantee productivity, traceability of flows and respect of delivery deadlines.
–A human capital competent in the various logistics professions; the acquisition and continuous development of expertise is reinforced in some cases by the creation or use of training centers.
–A worldwide network of partners and logistics sites in several countries on all continents.
“We are a global integrator of logistics solutions, our internal resources and the logistics assets of our partners enable us to achieve high levels of flow massification in order to offer global logistics solutions at competitive rates” (LSP, sales director). “In Morocco, we have the chance to collaborate with Maroc express, CTM, Marsa Maroc and other logistics specialists, and internationally, we work with logistics providers such as Emirates, San José Lopez and Cap Logistics” (LSP, commercial director). The LSPs rely on their strategic partners to offer integrated logistics solutions capable of managing national and international flows on behalf of several clients operating in various sectors of activity. These logistics solutions combine groupage or full transport activities, sea freight, cargo and air freight, warehousing activities and value-added services, customs clearance, transit and handling of administrative and commercial operations and delivery to the final customer.
Each LSP specifies in its packages the programming of sea crossings, air flights, airports, ports and countries served, agencies established in foreign countries and the network of partners on an international scale. In order to be able to optimize the flows between the various global connections, some LSPs are equipped with control towers that take care of the management of logistics operations and coordination with the logistics network. In order to ensure an efficient after-sales service, the LSPs have also call centers to guarantee a satisfactory quality of service and also to manage customer complaints.
84P2.2. The LSP developers of adapted solutions are specific logistics integrators.
We have observed that developers of cross-disciplinary logistics solutions invest in standard logistics assets that contribute to the realization of logistics activities and the management of multi-sector flows from the point of origin to the point of arrival, in order to achieve significant economies of scale, made possible by the pooling of resources and means. The second category of logistics integrators invests in logistics assets adapted to the nature of the logistics flows that fall within a very specific sector of activity. Thus, we noted the presence of a leading LSP in Morocco in the field of automotive logistics. Indeed, since the installation of its flagship customer in Morocco, which is only the leader in automotive manufacturing in Africa and France, the LSP has invested in a latest generation warehouses and customs clearance areas. This logistics platform is located close to its customer’s sites and to the sites of its subcontractors. “We have developed an advanced supplier store dedicated to international operations that perfectly meets our client’s needs” (LSP, regional director). “We offer our customers integrated door-to-door solutions to manage the flow of vehicles, we also offer a control tower to synchronize the flows on an international scale” (LSP, regional director).
In addition to storage activities, the LSP also carries out light vehicle transformation activities or mechanical and aesthetic preparation. In practice, the integrated logistics solution, which is exclusively adapted to the vehicle export supply chain, includes storage, preparation, co-manufacturing,export customs services, road, sea and air transport and the distribution of new vehicles in the destination countries. For the import supply chain, the LSP has set up a warehouses and customs clearance areas located near the major importers of new cars in Morocco. This bonded logistics platform enables the LSP to offer an integrated logistics solution from the departure factories located abroad or the assembly lines in Morocco to the distribution of vehicles in the branches. For all these logistics operations carried out, the LSP invests in car-carrying trucks and relies on information technology to track and trace each vehicle in order to enable customers to locate their flows along the import and export logistics chain in real time.
Also, we have recorded the presence of LSPs that offer integrated logistics solutions exclusively adapted to the agricultural and food-processing 85sector. These LSPs invest in temperature- controlled transport fleets to control the cold chain, they also invest in logistics facilities adapted to the constraints of agricultural and food-processing flows and also in specific expertise and know-how. Integrated logistics solutions in the context of cold supply chains include national and international transport, the consolidation and grouping of flows for export in temperature- controlled logistics platforms, the performance of value-added logistics activities such as order preparation, compliance with health regulations, enhancement of the value of agricultural and agri-food products, labeling, completion of customs formalities, international road transport or maritime chartering to destination countries. “We are specialized in cold logistics, we accompany exporters of fresh and frozen food products through the massification of flows in a cold storage platform” (LSP, general manager).
In view of this diversity of professions and expertise of LSPs, it is important to note that over the last ten years, several world-renowned LSPs have set up in Morocco to take advantage of the opportunities offered by the Moroccan and African markets and to benefit from the incentives for investment in logistics infrastructure near airports and seaports, the most important of which is the port of Tangier Med I, the leader in maritime connectivity in Africa with direct connections to 174 ports and 74 countries on the five continents.
3. Discussion
Our empirical study allowed to identify different categories of LSPs that are differentiated/characterized by two main dimensions. The first dimension focuses on the nature of the activities, services and solutions proposed and implemented, while the second dimension focuses on the target customers, whether they are ordinary customers who request a “standard” logistics service in line with the evolution of the logistics businesses of the LSPs or customers who demand a personalized logistics service that is adapted to their sector of activity. The intersection of these two dimensions allowed us to identify four typologies of LSPs that contribute to the integration of supply chains to varying degrees:
86–The first category offers traditional logistics activities associated or not with value- added logistics services aimed at ordinary customers. These LSPs invest in standard logistics assets (truck fleet, warehouses), develop general logistics skills and rely on information technologies offered by SCMIT solution integrators. Because of their strategy, these LSPs are considered as integrated players in the logistics chains. The wider the service offer, the stronger the integration.
–The second category offers traditional logistics activities and value-added logistics services that are tailored to particular customers with specific needs. These LSPs invest in non-standard logistics assets, develop business logistics skills, and deploy information systems aligned with customer needs. By virtue of their strategy, these LSPs are highly integrated into the supply chains.
–The third category offers integrated international logistics solutions for ordinary customers. These LSPs invest in logistics platforms close to ports and airports, develop logistics skills adapted to several trades and design sophisticated information systems. These LSPs are supported by a global logistics network made up of several players that may be airlines, shipping companies, carriers or 3PL providers established in other countries. The strengthening of this global network has been made possible by alliance, merger and acquisition strategies.
–The fourth category offers integrated logistics solutions that are tailored to specific customers. These LSPs invest in specific logistics assets, develop business logistics skills and design specific information systems. It corresponds to multinational LSPs that offer integrated logistics solutions for specific products and equipment (such as port cranes). These LSPs also carry out industrial activities of minor transformations in their logistics facilities.
87Conclusion
In conclusion of this contribution, we note that the market for the provision of logistics services in Morocco is marked by the presence of several categories of LSPs that deal with the most basic operations to the realization of sophisticated logistics services that tend to contribute to the integration of all supply chain partners at the national and international level. This diversity of professions and expertise of the LSPs in Morocco is nevertheless paradoxical in view of the limited outsourcing rate which is 14% for warehousing activities. It should be underlined that despite the presence of world-renowned LSPs in Morocco that are more focused on the international market, logistics in Morocco remains traditional and immature, dominated mainly by traditional carriers that sometimes adopt informal and anti-competitive practices. Indeed, only a handful of Moroccan groups and multinationals targeting the local market have outsourced their logistics activities of transport, warehousing, and other value-added services. Moroccan small and medium-size companies, which represent the broadest fringe of the industrial sector with some 90% of firms, have a heritage culture that encourages them to internalize their warehousing logistics activities in their own warehouses and logistics platforms.
It is important to note that the typologies of LSPs identified in our empirical study have limitations, depending on the specific context of the field in which we are working. Indeed, it is only during the last ten years that providers developing integrated logistics solutions have started to settle in Morocco. The reasons behind these installations being the opportunities offered by Morocco. The establishment of car manufacturers, aeronautics, equipment manufacturers of various ranks, franchises of major retail brands, etc., is the first factor that motivated the installation of LSPs in Morocco to support the development strategies of major clients by offering them integrated logistics solutions internationally. Also, Morocco’s geostrategic position as an African and Mediterranean logistics hub at the gateway to both Africa and Europe combined with a favorable institutional environment are also significant factors in the emergence of global LSPs whose main added value is the 88interconnection of logistics networks. The results of this empirical study in an emerging market such as Morocco invites researchers to further explore the delivery and LSPs that are internationalizing in Africa, but also Moroccan LSPs that are internationalizing in Africa and the rest of the world, particularly by deciphering their logistics solutions that contribute to the integration of international supply chains according to target markets, target sectors, and development strategies envisaged in terms of mergers, acquisitions and strategic alliances.
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1 http://www.3PLstudy.com. Accessed on November, 20, 2020.
2 http://www.3PLstudy.com. Accessed on November, 20, 2020.
3 Under the Law No. 59-09, the AMDL’s mission is to contribute to the implementation of the government’s strategy for the development of logistics and to implement the government policy for the promotion of the sector and logistics.
4 The authors thank the reviewers for their careful reading of the manuscript and their constructive remarks to improve and clarify the manuscript.
- CLIL theme: 3306 -- SCIENCES ÉCONOMIQUES -- Économie de la mondialisation et du développement
- ISBN: 978-2-406-12261-6
- EAN: 9782406122616
- ISSN: 2555-0284
- DOI: 10.48611/isbn.978-2-406-12261-6.p.0069
- Publisher: Classiques Garnier
- Online publication: 10-27-2021
- Periodicity: Biannual
- Language: English
- Keyword: logistics service provider, integration, supply chain management, emerging markets