Abstract
This paper looks at the impact of digitalization on third-party logistics (3PL) business models. An eclectic framework for the analysis of digital disruptions in service industries is elaborated by linking Porter’s five forces to insights from research on digitalization and innovation. Applying this framework to the business field of 3PL reveals that logistics service providers face significant digital hardship from new technologies such as autonomous vehicles and 3D printing as well as from platform-based business models and the sharing economy. We see the following changes in the competitive arena: First, 3PLs focusing on standard services may lose significant market share in the near future. Second, management-related 3PL activities seem to be increasingly offered by new external competitors, which may downgrade 3PLs to simple forwarders. Third, digitalization enables the forward or backward integration of 3PL customers and suppliers when they establish their own services. In addition to its threats, the opportunities of digitalization for 3PLs are discussed. These include the customization of standardized logistics services, the provision of cloud logistics services, platform-based asset and logistics infrastructure sharing, the “physical internet” as a future transportation system and the adoption and integration of 3D printing into existing 3PL business models.
Highlights
Over the past several decades, logistics activities have increasingly been sourced out to specialized third-party logistics providers (3PLs) [1]
This paper focuses on 3PLs, as 3PLs play a central role in the logistics service industry and provide a wide range of services, which have several weak points potentially susceptible to digital disruption
Three major threats arising for 3PLs from digital disruptions can be extracted:
Summary
Over the past several decades, logistics activities have increasingly been sourced out to specialized third-party logistics providers (3PLs) [1]. Platforms such as Cargomatic [2] and Uber Freight [3] enable cost-efficient, real-time, on-demand arrangements of transports that cut into the domain of logistics services. As pointed out in a study by the consultancy company Oliver Wymann, logistics start-ups from the USA and Asia with high financing volumes are transforming the entire logistics industry [5]. This puts significant pressure on traditional logistics markets such as Germany, Sweden and the Netherlands, with their established market players [6]. Experience from other industries such as travel and retail shows that digital disruptions may change entire markets within a very short time
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