Using fourth‐party logistics management to improve horizontal collaboration among grocery retailers

Abstract

PurposeThere is a paucity of literature considering horizontal collaboration among grocery retailers, suppliers, and third‐party logistics (3PL) providers. This paper seeks to investigate benefits of and barriers to the use of fourth‐party logistics (4PL) management as a catalyst for horizontal collaboration.Design/methodology/approachThree suppliers, three logistics service providers (LSPs), and one grocery retailer participated in semi‐structured interviews for this exploratory qualitative study.FindingsLarge LSPs can establish 4PL management but the significant investment required to do so is a deterrent. Interviewees believed 4PL would negatively influence the grocery retailer‐supplier dynamic but simultaneously would provide key potential benefits. Retaining supply chain control means more to grocery retailers than cost efficiencies realised through horizontal collaboration.Research limitations/implicationsFierce competition among major grocery chains means that most are unwilling to participate in studies of their systems, which restricts the research scope.Practical implicationsSome stakeholders want deeper integration into grocery supply networks, and the 4PL model could apply to diverse sectors and circumstances. This study shows that barriers to such integration are created by power plays among lead stakeholders in grocery retailing that inhibit horizontal collaboration regardless of cost or other benefits.Originality/valueThe study investigates an under‐researched aspect of horizontal supply chain collaboration in the highly relevant retail grocery sector: a high volume, mass market industry that requires an enormous logistics infrastructure and highly embedded networks of relationships.