Source: J-P Rodrigue & CPCS.
- The international division of production associated with globalization helped set a global network of manufacturing activities, implying that producers and consumers tend to have an acute geographical separation requiring complex transportation services.
- A increasing focus of manufacturers and retailers on their core business (known as core competencies) and sub-contracting activities such as logistics where they have less expertise. The goal is to promote the respective specializations in production and distribution.
- Better utilization of transportation assets and resulting economies of scale. 3PLs can make better use of transportation assets by balancing the needs of multiple client shippers across transportation and distribution functions, locations, etc. (e.g. developing networks to maximize backhaul).
- Productivity gains in supply chain management in terms of costs and reliability that can be derived from the managerial and information technology expertise provided by 3/4PL.
- Offshoring and outsourcing resulted in longer and more complex supply chains in which several segments of the transport chain are taking place in environments unfamiliar to the outsourcing company.
- 3/4PLs are more prone to implement novel supply chain management practices requiring a higher expertise on material flows such as transloading, crossdocking and shipment tracking.
- A general trend towards deregulation permitting a higher level of interaction between transportation modes. These interactions rely on complex transport services.