The GSK vaccine works independently with pharma, so we are not adopting the 4PL model yet but we’ve gone through the assessment phase, and that’s what I wanted to maybe discuss a little bit from the experience that we had during that assessment and what benefits you can derive from the 4PL model.

In terms of 2PL, I think everybody knows what a 2PL is. This is typically your trucking company, this is your external warehouse where the company will own the asset or the facility, and you’re directly interacting with them through the contract, through the quality agreement, and so on.

Now, 3PL, these are your freight forwarders. Many of you who are involved in airfreight, for instance, you will not go directly to the airlines; you’re going to go to a freight forwarder like DHL, Kuehne + Nagel, and so on, and they will book and manage your flight. It could be a mix of their own assets, but they could also be subcontracting a lot of the assets from other subcontracted parties.

There are different levels of services they can provide you, starting from a control tower to also offering other logistic services, like customs brokerage and so on, but it does not give you the end-to-end view from the site all the way to the market or to the end patient, so it is also limited in that sense.

Their services would typically include your warehousing, transport management, distribution management, and so on. That’s just to show you from vaccines we are dealing with a number of LSPs and then the 3PLs would be dealing with the different 2PLs.

Now, two facets of 4PL, by pure definition 4PL is really a management layer above your 3PL. This is an integrator, a management service who would be basically taking on the activities from your group because your group may not have the time and the resource to manage all the different 3PLs, so you may want to bring in somebody, or some company, or some entity who will manage the services for you.

By definition, this should be non-asset based. They do not transport themselves, but they are using subcontracted providers who will do the services for you, and it’s really a strategic process outsourcing in terms of the integration business they will do. In most cases, they will use subcontracted parties.

So in a 4PL model, that’s your 4PL management level with the different 3PLs, and in a lot of cases the 3PLs could be the ones you’re already working with and you basically tell them, these are my 3PLs, manage them for us.  Now, the 4PL LLPs we’ve seen in the market, this is typically a 3PL with a lot of steroids. What I mean by steroids is they’re able to provide you with a lot of end-to-end logistics services in terms of the control tower concept and in terms of also the actual operational execution of it.

So, again, it’s management the layer above the 3PL, and a 4PL is a 3PL when they’re moving the cargo themselves. If not, they are essentially your 4PL. So what will happen is in a 4PL LLP operation they may use their own LSPs, but they will also look at other 3PLs as well where they can potentially bring in better rates, or better value for the service.

So why look at a 4PL model? Why could it be interesting for you? This is the GSK end-to-end distribution where you have the network of manufacturing sites, the bulk production, the filling, packaging operations. Then you have your external warehouses, distribution centres, and this is really the in-market distribution.

So once the product lands in the market, you may have your own company who is doing the distribution activities as well, and finally, once it goes to the different wholesalers where you have the sales and you have ordered in the cash at that point.

So this is where your main responsibility ends, and when I look just within the vaccines platform, obviously the pharma the platform is much bigger because they’re dealing with 120 odd different sites, but even within the vaccines platform, we have 14 different manufacturing sites using different LSPs, and by LSP I mean 3PLs, 2PLs, and so on.

We have visibility from a global perspective on some of the 3PLs that we manage for most of the freight, but there are plenty of others where we don’t have much visibility, so it’s really dependent at the site level where they’re managing those 3PLs. So you may have a number of those 3PLs, LSPs working on behalf of the manufacturing sites, R&D sites, and CMOs, so you need to have a big, broad manufacturing base if you really are going to consider something like a 4PL.

Then, finally, you also have the distribution centres where you would be liaising directly with some of your external warehouses where they would be keeping the products, whether it’s storing them or whether it’s doing the packaging operations for them.

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