If You’re a MultiNational, Why Would You Use a Domestic 3PL?

After reading a recent article in the new SCMR that contained a 3PL update which noted that analysts suggest global/domestic lines may be blurring, all I can do is ask why would a multinational use a domestic 3PL in 2010? A modern multinational is in-sourcing, out-sourcing, near-sourcing, far-sourcing, high-value sourcing, and low-cost-country sourcing … and moving products back and forth all over the globe. What possible logic would there be for using a domestic 3PL? If you’re outsourcing your logistics to a 3PL, then you’re outsourcing to use the full capabilities of the 3PL, not just to manage product as it comes into or leaves your country.

You could use a domestic 3PL to manage your product nationally and then a global 3PL to mange your product globally if you really wanted to, but, in doing so, you’re creating complexity, cost, and sowing the seeds of future disruption. If two 3PLs have to coordinate with every international transaction, that’s unnecessary complexity. If you’re using two 3PLs, that’s twice the 3PL fees. And if you do a lot of international shipments, that’s a lot of handoffs and a lot of chances for something to go terribly wrong.

Plus, with the greatest growth coming in China and India, chances are that your domestic market will be less and less important as time goes on. So why would you, as a multinational, use a domestic 3PL? If you have a good reason, let me know!

Share This on Linked In