A company switched from traditional 3PL to 4PL logistics providers and cut costs by moving from annual contracts to daily, order-based pricing that captures spot market rates. The right 4PL partner provides shared optimization software and flexibility, but picking the wrong one can undermine those gains.
And that is where I think these organizations have evolved over a period of time and providing the best of the services. In fact, we have moved from a terminology perspective from 3PL to 4PL in some of our regions and have been reaping a lot of benefits out of it. They are nimble, they are flexible, they are fast, and they are able to give us the cost benefits which we desire for. And For an organization size like us, we are not so nimble and flexible to move in such environment and in such pace which can be done by such supply chain organization. A case in point, for example, when we do our contracting with our transporters, we generally tend to do it for a year or beyond 2 years period. But we lose out to the fact as to what is happening in the market. space in terms of being flexible, being spot, as to how the market is shaping it up. But when we have gone to the 4PL, we have experienced that they can virtually do contracting on a daily basis or on the basis of how large the order is and give us the benefit in terms of whether we need to go on a contractual basis or we need to go out on the spot basis. And these benefits are enormous in terms of ensuring that we get the best contracting rates available in the marketplace is concerned. And in terms of technologies, going to such service providers has given us the leverage in terms of network optimizations being one of them, in terms of optimizing the lanes, in terms of sourcing abilities, in terms of the softwares that they can not only provide it to us, but comes cheap because they are able to source it and provide it to a number of players at the same time. Having said so, I think, as Pramod rightly said, I think selection is a key criteria. Having a right partner is essential in terms of ensuring that you reap the benefit. Otherwise, there can be a lot of leakages as well. Thank you, Amit. Yeah.
