1. Cecilia Cabodi London, 16th March 2004 Strategic Opportunities in Fourth Party Logistics © 2003 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

2. Today’s presentation 01: Introduction 02: Overview of fourth party logistics in Europe 03: 4PL: myth or reality? 04: Factors driving the development of 4PL 05: Fourth Party Logistics: the way forward? 06: 4PL Theme Based Workshop 07: Conclusions 08: Key Highlights of the report 09: Questions

3. Introduction The logistics industry is being too cautious in its forecasts of the 4PL market. Frost & Sullivan research shows that fourth party logistics holds massive potential. 4PL is forecasted to go from €4,7 billion in 2002 to €13 billion in 2010.

4. 4PL Partnership A 4PL Provider is a Supply Chain integrator that assembles and manages the resources, capabilities, and technology of its own organisation and other complementary service providers COORDINATION INTEGRATED IT SOLUTION 3PL SUPPLIER MANUFACT. FACILITIES WAREHOUS. DISTRIBUT. CUSTOMER Source: Frost & Sullivan

5. Market Overview 4PL is the next step in the evolution of the Logistics Industry; More and more customers require partners to share in risks and gains; They also demand a “Super- provider” to act as a single point of contact; 4PL can be a way to enter a higher margin and added value business; Today’s market increasingly requires solutions as opposed to services. There is a strong need to be pragmatic in the application of the 4PL concept.

6. 4PL: Myth or reality? There is still confusion over the definition of a 4PL provider; The 4PL market is still at at an early development stage; Many companies still identify this model with a consulting environment; Different 4PL business models are taking shape with variations on the original definition; Discussions with leading industry players highlighted this area as one of the hot topics at the moment.

7. COST PRESSURES STRATEGIC IMPORTANCE OF LOGISTICS ACTIVITIES Source: Frost & Sullivan HIGH MEDIUM CRITICAL LOW NON- CORECORE Electronics High-Tech Chemicals Automotive Pharmaceuticals Industrial Retail FMCG Textile Oil, Gas Petrochemicals 4PL: Myth or Reality?

8. And our customers said: “ 4PL may well be the flavour of the decade ” January 2004

9. Factors driving the development of 4PL IMPACT DRIVERS Customer’s ever increasing and more complex requirements Globalisation trends CO's higher propensity to enter higher margin and value-added business Push to improve asset utilisation and environmental compliance Increasing availability of supply chain technology

10. Fourth Party Logistics: the way forward? 4PL is not the solution for every supplier and shipper; However the right organisations can greatly benefit from this type of collaborative engagement; It is unlikely that 3PLs will be replaced by 4PLs completely; A minimum period of 5 years will be needed to assess the feasibility of this concept and for the market to develop.

11. The theme of the workshop will be: ‘Opportunities in the European 4PL Market’. Discuss business cases from customers/existing 4PL partnership Participate in interactive, output- oriented workshop exercise  Develop a business case for 4PL  Identify the best route to 4PL Explore global 4PL opportunities Learn how customers operate 4PL- type models internally Venue: Frost & Sullivan, London Workshop Days: April 22-23, 2004 4PL Theme Based Workshop

12. m Accenture m Kuehne & Nagel Lead Logistics Solutions m John Gattorna m Vector SCM m Unilever m Alan Waller m IBM Business Consulting Services m Ricky Coussins m Cecilia Cabodi Keynote Speakers

13. Conclusions Now is the right time to gain greater awareness of this market. Forward thinking organisations will be able to take advantage of the opportunities presented by 4PL; Major opportunities exist for different market participants; 4PL type deals are already under discussions Customers are looking for 4PL solutions to their specific supply chain issues.

14. Key Highlights of the report This is virtually the only independent strategic report on the European 4PL based on primary research; In-depth section on customers’ perception and requirements of 4PL; 4PL roadmap for the European Market and market opportunities; Key features and competencies of a 4PL Provider; Geographical analysis of the potential for 4PL (Europe, EU vs.US, EU Enlargement and 4PL) Key market and technology analysis (particularly RFID) Key factors in successful 4PL partnerships Barriers to entry and difficulties encountered in 4PL partnerships

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