International supply chains can be very complex due to pre-carriage, main and on-carriage legs, consolidation and deconsolidation of shipments, the use of different transport modes, and the involvement of many different parties. Supply Chain Control Towers and, if outsourced, 4PLs can add value by designing and optimizing these supply chains and managing operational activities. What are the services/processes and roles of a Supply Chain Control Tower or 4PL in the case of international transport, and what capabilities are required for this?
International supply chain characteristics
Suppliers and consolidation points in origin regions (e.g. NA, SA, Africa and/or APAC)
Buyers’ consolidation (BCN) in origin region for high volume flows/regions
Deconsolidation points, plants and receiving warehouses in destination regions (e.g. Europe)
Use of various transport modes for main leg: Air, Ocean (FCL/LCL) and/or Rail
Use of Container Freight Stations (CFS) and/or Multi Country Consolidation (MCC) points for (de)consolidation and value added activities
Taxes and duties to be paid, Free Trade Zones and/or bonded areas might be applicable
Role of a Control Tower/4PL
We can distinguish 3 different models regarding the role of a Supply Chain Control Tower (SCCT) or 4PL:
Forwarder management: the forwarder as instructed by a SCCT or 4PL has the end-to-end responsibility for door-to-door, door-to-port, port-to-door or port-to-port transport (depending on incoterms)
End-to-end sub-contractor management: the SCCT or 4PL has this responsibility and is instructing carriers and CFS/MCCs directly
Hybrid model: the SCCT or 4PL instructs 3PL/2PLs for inland transport and/or (de)consolidation and forwarders for main carriage plus pre- or on carriage depending on the network design for a specific customer/lane
Model 2 fits more complex, mature supply chains and is often used in Ocean or Rail transport, model 1 more in Air transport. Moving from model 1 to a hybrid model or from hybrid model to model 2 could well be a growth path.
SCTT/4PL services and capabilities
The specific Air, Rail & Sea capabilities for each service are:
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