THE INDUSTRY OF LOGISTICS SERVICE PROVIDERS IN BRAZIL: CHARACTERIZING THE MAIN OPERATORS

The main objective of this work was to analyze the characteristics of the logistics operators sector in Brazil. In order to also obtain a comparative assessment of the Brazilian market with that of the United States - the most developed country with regard to logistics -, the results were also compared with those of similar surveys carried out in the United States, as well as with the recommended literature. The research consisted of interviews with 8 companies providing logistics services that fit within what was considered, by this work, as a logistics operator. Part of the results coincides with what the literature preaches and with what is happening in the United States. There are, however, some important discrepancies, mainly with regard to problems, such as the complexity of taxes and the poor infrastructure of modes in Brazil, and what is happening within the sector, such as the improvements noted in Brazilian information systems.

INTRODUCTION

The market for providing logistics services has been growing very quickly all over the world and, consequently, also in Brazil. There are several evidences of this phenomenon. Boyson (1999) showed that, in the North American chemical industry, the average number of outsourced logistic activities, per company, grew from 1,5 to 5,5, in the period between 1989 and 1995, indicating a strong tendency to increase the scope of outsourced logistics services. At the same time, a report by Fortune magazine indicated that 60% of the 500 largest companies listed by it outsourced at least one of the activities that make up their logistics process, evidence of the level of diffusion of the practice of logistics outsourcing. In another survey involving the European and North American markets, Sink (1997) showed that 78% of the European managers, and 46% of the Americans interviewed, stated that they were committed to outsourcing their logistics activities, and that the tendency was to increase the number outsourced activities.

The result of all this has been the rapid growth of the logistics service provider industry, as shown by Armstrong & Associates surveys (1). Between 1996 and 1998, the operating income of the 56 largest North American logistics service providers increased from US$ 28,5 billion to US$ 39,6 billion, which corresponds to an average growth rate of approximately 18% per year.

In Brazil, despite the outsourcing process of logistics activities being relatively recent, and the lack of reliable statistics, the market potential seems to be high. A study by the World Bank estimates that spending on transport in the country alone is equivalent to 10% of GDP, which would correspond to approximately US$ 60 billion. Large international logistics service providers seem to have realized this potential. From 1997 onwards, companies such as Ryder, Penske Logistics – in a joint venture with Cotia Trading, Mc Lane (from the Wall Mart group) -, Mark VII, Emery Worldwide, Hellmann Logistics, Danzas and Mosolf started to arrive in the country, joining a growing number of Brazilian companies, such as Columbia, Cometa, Metropolitan, Delara, Marbo, Mercúrio, Hércules and Delta, which were already experiencing substantial growth in this market.

Although fairly recent, the Logistics Service Providers (LSP) industry has been evolving rapidly in Brazil. One of the consequences of this evolution has been the emergence of various operating formats, which has led to difficulties in categorizing logistics service providers. Little is known about the main barriers and opportunities for these companies to operate in Brazil.

There are countless possibilities for outsourcing logistics activities. For this reason, in countries where LSP activities are more developed, market segmentation has been increasing, ranging from simply outsourcing transport activities to hiring third parties to operate the entire logistics process.

Due to the increasing importance and complexity of outsourcing logistics, the concern with a better understanding of these activities has increased. However, most known studies have examined the sector from the perspective of contracting companies. In general, these studies encompass the necessary steps to outsource these activities, the situations in which outsourcing should be done and what can be expected from it.

The literature dealing with the problems and characteristics of logistics service providers, however, is reasonably scarce. Issues such as necessary prerequisites to be considered a provider of integrated logistics services (the so-called logistics operators), the different existing formats, industry perspectives and trends in adding value to the customer are very little discussed. (Berglund, 1999). This work seeks to contribute to a better understanding of this industry, and its situation in Brazil, based on a study of 8 cases, selected among the largest and best known providers of integrated logistics services, operating in Brazil.

DIFFERENT DENOMINATIONS AND FORMATS OF PSL

There are several names found in the international literature for companies providing logistics services. Here we will highlight some of these denominations and their most common meanings.

Terms such as third-party logistics providers (3PL), integrated logistics providers, contract logistics companies, and logistics operators are some of the terms commonly used in international literature to name companies providing logistics services. Internationally, the first denomination, ie 3PL, is clearly the most used. In Brazil, there is a strong tendency to use the term “logistics operator”.

According to Gardner (1994), the term third-party logistics (3PL) began to be used in the 80s as a synonym for “subcontracting elements of the logistics process”. Although the term 3PL means, for a large number of authors, nothing more than a company that provides any type of logistical service to third parties, some associate this name only with companies capable of performing a broader set of logistical services.

In the 80s, the tendency towards the integration of logistics activities – two or more activities carried out in a coordinated manner – became more frequent, leading some authors to associate the expression 3PL with companies capable of providing more than one type of logistics service in an integrated manner. . Berglund (1999), for example, associates the expression 3PL to the company that offers, through a contract, at least, transport and storage management and operation services. According to him, a 3PL contract with a client must be for at least one year and must also provide for management, analysis and project activities. It also emphasizes the possibility of adding activities such as inventory management, information - such as tracking and tracing orders - and offering activities that add value such as a 2nd packaging or product installation, or even supply chain management .

For Lieb (1996), the name 3PL applies both to companies that provide all services related to the logistics process, and to those that provide only a specific activity in this process. Despite agreeing with the above definition, Sink (1997) believes that all activities must be conducted in a coordinated and integrated manner and that, as indicated by Berglund (1999), 3PLs, to be called as such, must offer, in the minimum, two types of services. It is important to remember that there are countless types of services that can be provided by 3PLs. Lieb (1996), for example, identified 13 different types of services as being most commonly performed by 3PLs: warehouse management; load consolidation; information systems; fleet operation or management; freight negotiation; carrier selection; issuance of order; importation exportation; return of products; order processing; assembly or installation of products; deconsolidation of products for customers; stock replenishment.

In Brazil, a recent study on PSLs, carried out jointly by the Associação Brasileira de Logística, Fundação Getúlio Vargas and Associação Brasileira de Movimentação e Logística, and published in Tecnologística (February/1999) defines a logistics operator as being “the supplier of logistics services, specialized in manage and execute all or part of the logistical activities in the various stages of the supply chain of its customers (...) and that has the competence to, at least, simultaneously provide services in the three basic activities of inventory control, warehousing and transport management. The other services, which may be offered, work as differentials for each operator.” This definition is quite similar to the one used for 3PLs, except that the latter mentions the integration of activities as an element present in its concept.

Therefore, it appears that different authors use different criteria to characterize 3PLs. Some are more rigorous, requiring that in order to be classified as a 3PL, a logistics service provider should carry out a wide range of activities, in an integrated manner, have design, operation and management capacity, and have long-term contracts with its customers. Others are less rigorous and consider that any company that performs some logistics activity, under contract, for third parties, with planning, operation and management capacity, should be considered a 3PL.

THE DIFFERENT ORIGINS OF LOGISTICS OPERATORS

A historical analysis of 3PLs indicates that these companies have several origins. Just look at some of the best known international operators: Exel Logistics originated in the warehousing activity, Cartepillar Logistics as the logistics department of Caterpillar, a heavy equipment manufacturer, and FedEx, as an express delivery company (Gardner, 1994).

The broad outsourcing movement, sponsored by industrial and commercial companies from the 80s onwards, the growing importance of customer service, new relationship standards in supply chains, combined with the greater availability of information technology for logistics applications, have contributed strongly to the growth of the 3PL industry. The increase in the complexity of the supply chain has made investments in logistics increasingly necessary, an area that is often not part of the core business of companies. In these cases, several of them preferred to outsource all or some of these activities and concentrate on their core business. Therefore, ample opportunities have opened up for providers of logistics services, resulting in the emergence of a large number of operators

The growth in the number of 3PLs and the countless possibilities for action resulted in an industry segmentation. Research carried out by Sink (1996) with representatives of several North American industrial sectors allowed the identification of several dimensions of segmentation of logistics service providers. In general, 3PLs can be segmented based on at least five basic dimensions: services offered, geographic scope of activity, types of industries they serve, available infrastructure (ownership of assets), origin activity.

From the point of view of the types of services provided, 3PLs can be classified into two large basic groups: operational specialists and integrators. The first group corresponds to companies that offer specific services such as, for example, transport, storage, consolidation or labelling. In this case, despite performing only a basic activity, there is the possibility of adding value to the customer by incorporating extra services such as order processing, repair and inventory control. The core competency of this group is operational excellence. In the second case, the company is able to provide a complete logistics solution, since it covers a wide range of services planned and managed in an integrated manner. Also in this case, it is possible to offer extra activities, outside the set of basic services, as some consulting companies do when developing complex logistical projects for specific clients.

Berglund (1999) found that there are significant differences between the two groups in some performance dimensions, as shown in the table below:
The large difference in performance between the two groups of companies contributes to the understanding of the reasons for the growth of integrated 3PLs. This comparison also highlights what represents one of the characteristics of most integrated 3PLs: the high degree of subcontracting. For Berglund (1999), this characteristic is the result of this segment's focus on the conceptual aspect, such as supply chain analysis and knowledge of innovative logistical concepts (such as cross-docking and merge-in-transit) for the preparation and management of projects.

 

With regard to the geographic scope, one can clearly perceive a tendency of the main providers to expand the space of action as a way to achieve greater use of their assets and to avoid the loss of domestic accounts of customers with international operations (Lieb, 1997) .

The policy of segmentation by type of customer is another trend identified by the same author. A first dimension of customer segmentation is its type of industry, aiming at greater sectoral specialization and customization. Typical examples of priority industries for segmentation are automotive, high technology (IT, telecommunications), food and paper. It is also noticeable, both in the USA and in Europe, a trend towards segmentation based on the size of the customer. In the USA, this type of segmentation is well defined, in a way that the big providers serve, almost exclusively, the big accounts. Although small customers are increasingly outsourcing their logistics activities, they do so to specialists such as transporters or warehouses. It appears, however, that in Europe some large providers are already responsible for the logistics of smaller companies, and that this may become a good market niche for large providers.

According to Africk (1994), the most general of all types of segmentation is the one that divides operators into based or not based on assets – what Sink(1996) called ownership of assets. Another type of operator identified by Africk (1994) are the hybrids, that is, those who have their own assets but also subcontract third-party assets. According to him, these companies are, in general, a group where the “child companies” have the qualified human resources and the information systems, and the “parent companies” the physical assets. In this situation, companies like Ryder and Exel, for example, fit. Still regarding asset ownership, according to Africk (1994), contracts with asset-based providers can be structured based on dedicated capacity or dedicated assets. In the first case, the provider undertakes to meet a certain volume and service levels specified by the contracting party, but will use the assets for several customers. In the second case, the provider makes its assets available to a single customer, thus increasing the guarantee of meeting or exceeding the specifications. (Afrik, 1994)
Muller (1993), draws attention to the fact that there is not, in principle, one type of operator better than the other; there are types of operators best suited to the needs of specific companies.
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PROBLEMS AND OPPORTUNITIES FOR LOGISTICS SERVICE PROVIDERS

One of the main obstacles to the growth of logistics service providers is potential customers' fear of losing control of their logistics and, consequently, of the level of service provided. However, Kao (1993) points out that these insecurities, or even those related to product damage, can be overcome by establishing performance standards that take these points into account.

According to Lieb (1998), there are a number of other problems faced by the industry, including the complex and expensive process of selling services, the difficulties in obtaining qualified personnel, the cost associated with the development of information systems (despite being in process cost reduction, it is still one of the biggest sources of costs in the sector) and, agreeing with Laarhoven (1994), the intense pressure for price reductions.

The costs incurred in the preparation and negotiation of proposals and in the development of customized solutions, especially those planned in advance of large bids, end up resulting in expenses of millions of dollars, according to CEOs of companies in the sector. (Lieb, 1998)

The issue of recruiting and selecting qualified personnel becomes critical due to the need for quick hiring for the execution of a recently closed contract. One CEO described the situation to Lieb (1998): “These people are not just sitting around our offices waiting for bids to be won. When we get one, we have to add staff quickly, and that's a problem.” (p.75). A solution used to get around the problem is to hire staff from the client company that, in general, downsizes its staff when outsourcing. Other practices, according to Lieb (1998), are: the hiring of recent graduates or employees of competing companies. One consequence of these difficulties is that, within a year, the presidents of nine out of the top twenty-five logistics service providers have changed jobs. In an industry where partnership contracts tend to get longer and longer, this can be a source of trouble.

The issue of training is seen by Lieb (1998) as another major problem generator. According to him, due to the need for a quick entry into operation, there is not much time left for the employee to receive adequate training. So, despite not even being familiar with the organization of the provider, he is already working with the customer. This contracting policy generates communication, coordination and integration problems.

Regardless of the chosen industry, Lieb (1998) draws attention to the transformations that have taken place in relation to information systems, which are no longer differentiating factors, to become a prerequisite or basic need. Even companies that do not intend to be leaders in this area have massively invested in information technology. As a way of minimizing the impact of this trend on operators' costs, several of these companies have entered into partnerships with IT (Information Technology) companies. An example of this is Ryder's partnership with IBM and Andersen Consulting.

Considering the variety of names and definitions regarding 3PLs, and the need to clearly define them, the decision was taken to adopt the name logistic operators, widely used in Brazil, to characterize providers of integrated logistic services, that is, the Integrators, according to Berglund (1999). For the purposes of this study, logistics operators are providers of logistics services capable of carrying out, at least, the execution and management, in an integrated manner, of storage, transportation, as well as inventory control.

METHODOLOGY

The main objective of this work was to answer the following general research question: How is the logistics operators industry characterized in Brazil?

In order to operationalize the research, the general question was divided into four secondary questions, presented below:

• What are the general characteristics of the surveyed companies?
• What services are offered and how do they relate to current market requirements?
• What infrastructure do companies have?
• What are the barriers and opportunities for the development of industry in the country?

In order to answer these questions, executives belonging to 8 different companies were personally interviewed, selected from a convenience sample, involving the largest and best known logistics operators in Brazil. A semi-structured research questionnaire, based on the international literature review, was developed and used during the interviews. The interviews lasted an average of 3,5 hours, varying between 2 and 5 hours.

Considering the method used, the results of this research cannot be generalized to the industry as a whole, allowing however to raise hypotheses that can be tested in a broader research, whose sample is representative of the industry as a whole.

ANALYSIS OF COLLECTED DATA

General characteristics of companies

The companies analyzed in this research have relatively little experience as logistics operators in Brazil. The average time of operation in the country is five years, with the oldest being on the market for 13 years, and the two newest for just 2 years. This fact was to be expected, given that the phenomenon of logistics operators is relatively recent in Brazil. It appears, however, that, for the most part, these companies already had extensive experience as providers of specialized logistics services, or even as operators in their countries of origin. Of the 8 organizations surveyed, 4 originated from storage companies, 3 from transport companies, and one from a courier company. As for the country of origin, 5 are typically national companies, and 3 had their origin abroad.

The average revenue of the companies was R$ 30 million in 1999, but there are significant differences between them. The largest of them had revenues of R$120 million, while the smallest had revenues of only R$1,0 million in the same year. These data, however, deserve correction, because while some companies have an independent “logistics operator” division, with separate accounting from the original company, others combine the new activities with the old activities of specialized logistics services provider. Just as an example, it is worth mentioning that one of the companies surveyed, which in 1999 earned only R$ 1,0 million as a logistics operator in the country, is one of the largest courier companies in the world, with a strong presence in Brazil, and the revenue of R$ 1 million does not include courier activities. On the other hand, another company that had the highest revenue among all the 8 surveyed, in the amount of R$ 120 million, has a substantial part of its revenue coming from operations of
road transport of vehicles.

Examining the origin of the companies, it can be concluded that, with a single exception, all operators examined owe their origin to transport and storage companies.

From the point of view of geographic scope, all the companies surveyed claim to have a nationwide presence, with 4 seeing themselves as operating globally. This global performance is due to the fact that 3 companies are subsidiaries of large international companies, with only one of national origin.

Services offered and customers served

The first feature that draws attention in relation to services is the variety of offers provided by companies. All, without exception, offer a minimum of 8 different types of services, i.e. road transport, air transport, warehousing, provision of dedicated resources, integrated logistics, logistics information management, control and payment of freight, and documentation (eg. issuance of invoices). Furthermore, it appears that 6 out of 8 companies offer 21 different types of services. Despite this wide variety, rail and maritime transport services have very limited offers. Only 2 companies offer rail transport services and 3 offer maritime transport services. This seems to reflect the distortion of the Brazilian transport matrix, which is totally dominated by road transport.

Also noteworthy is the small offer of consulting services aimed at designing logistics solutions for potential customers. Only 2 companies offer this type of service. This means an opportunity still little explored in Brazil.

Using as a basis the previously proposed definition of logistics operator, that is, companies capable of executing and managing, in an integrated manner, at least transport, storage and inventory control services, it can be stated that, with one exception, all 8 companies are classified as logistics operators.

Although the number of services offered is large, the companies' total revenue is heavily concentrated in a limited number of them. Among the services with the highest participation, transport and storage stand out, mentioned by 7 of the 8 operators as being the most important in terms of contribution to revenue. The third most important service, supply chain management, was mentioned by only 3 operators.

This broad set of services is offered to a limited number of customers. On average, the operators surveyed work with around 32 customers, and this number varies from a minimum of 6 to a maximum of 70. It is interesting to note that the two operators with the lowest number of customers, that is, 6 and 8 customers, respectively , are branches of large international operators. In addition to working with a restricted number of customers, operators execute contracts of relatively limited size. Only one of the 8 companies analyzed has a contract worth more than R$10 million. This seems to be an indicator that customers are contracting only limited parts of the logistics process with a given operator, instead of handing over all or a large part of the operation to an integrated operator.

Even under these conditions, it appears that the negotiation process for closing a given contract is reasonably long, taking an average of 5 months, but it can vary between 3 and 6 months. Asked about the existence of some selectivity criterion in the decision to close a contract with a given client, 7 of the 8 operators indicated their ability to meet the client's needs as the main restrictive criterion. Only one company indicated the value of the contract as a restrictive factor for accepting a new client. Another interesting piece of information regarding the client selection policy concerns the tendency towards specialization in certain industries. Five out of the 8 companies stated that they did not have a specialization policy, while the remaining 3 cited the automotive, electro-electronics, computers, consumer goods, and chemical industries as specialization focuses. These four industries are, together with the banking, graphic, photographic and wholesale sectors, the ones that most contribute to the billing of logistics operators as a whole.

When asked if there would be differences in the type of service demanded according to the geographic region, six of the eight respondents stated that the requirements were the same, regardless of the region. This result is influenced by the fact that the vast majority of customers of the surveyed companies are headquartered in São Paulo, which means that their requirements are extended to the other regions in which they operate. This fact indicates a clear myopia regarding the value of a service segmentation policy. The same result occurred when trying to correlate the client's industry with the type of service provided. The vast majority said there was no type of relationship and those who said there was, were only able to list differentiated services for a few industries. A striking example of the lack of attention to the issue of service segmentation occurs with electronic commerce. Six of the eight companies interviewed serve e-commerce customers. However, the services offered to this channel are the same as those provided to the traditional channel. This is perhaps due to the fact that the share of this segment in the total revenue of operators is still very small, varying between 2% and 4%.

Infrastructure available at operators

All interviewed companies own or, at a minimum, operate fleets and/or warehouses dedicated to their operations. All also offer dedicated resources to their customers if needed. With regard to the operators' warehouses, there is a strong concentration in the Southeast region, which has 44 warehouses, that is, around 68% of the total. Most of them are located in the state of São Paulo, which alone has 35 warehouses, that is, 54% of the total. This corresponds to an average of 4,4 warehouses per operator. The Northeast region, with 13 warehouses, comes in second. As for the operators, all, without exception, have at least 1 warehouse in the Southeast region. With regard to the other regions, three operators have a warehouse in the Northeast region, two in the South region, one in the Midwest region, and one in the North region.

Five of the eight companies interviewed have their own fleet. The number of vehicles, however, varies greatly, from a minimum of 7 vehicles to a maximum of 2.540. Even having their own assets, the surveyed companies make intensive use of third-party subcontracting. All, without exception, outsource some part of their activities. There are several outsourced activities, with road transport, air transport and courier operations being totally or partially outsourced by all 8 operators interviewed. Other outsourced activities are software development, shipping, warehousing, Internet applications, rail transport, EDI applications. Road transport, in addition to being one of the few that all companies surveyed, at least in part, outsource, is what invariably has the largest number of approved third parties. This number ranges from 15 to 200.

The answers referring to the use of information technology suggest a high rate of use of WMS in storage, despite the adoption of the bar code still not being so high (it is present in only 5 of the 8 companies surveyed). Online order tracking is already being offered to both e-commerce and traditional channel customers by 6 of the 8 companies analyzed. Responses to the use of EDI indicate that, despite the growth in Internet use, this system is still being widely used. Five of the surveyed companies have it. Systems that support the fleet do not seem to be being adopted on a large scale. Only 3 (three) companies have GPS and/or routing.

The average number of employees is 716, varying significantly between companies, from a minimum of 250 to a maximum of 3.700. From the point of view of education level, 8,00% have completed primary school, 1% have completed secondary school, 57,2% have completed higher education, and 2% have postgraduate degrees.

Seven of the eight respondents state that management-level professionals are recruited within the sector itself. Only 1 (one) company claimed to recruit from Universities, and also 1 (one) claimed to recruit from consulting firms. In a survey carried out by Lieb (1999) with 25 North American logistics operators, the interviewees stated that they recruit 25% of their personnel from universities and another 25% from the sector itself.

Although 17,5% of the workforce has at least completed higher education, there is a feeling of deficiency in personnel qualification, mainly with regard to the technical and managerial level. This feeling is perhaps associated with a lack of training and knowledge in logistics. More than 70% of the employees (this number varied from 50% to 90% among the companies) have a background in administration or economics. In third place comes engineering with an average of 10.5%, and whose variation is between 10% and 12%.

The existence of training programs is not a general rule among the interviewed operators, a worrying phenomenon due to the young age of the industry and the limitations of qualified personnel it faces. However, those who do not have a training program said they fund occasional courses, always seeking to satisfy the employee's needs.

Barriers and opportunities for industry development

The pressure to improve performance was considered the factor that had the greatest impact on the sector. However, the pressure to reduce prices is very close to the first place, indicating that both are considered equally important. This situation puts operators under strong pressure; reduce costs and improve service level simultaneously. The tendency towards an increase in the number of outsourced services, combined with the growth of e-commerce, indicate a probable growth of the market and a greater appreciation of operators.

Among the barriers mentioned, the high value and complexity of taxes, as well as the poor condition of the country's infrastructure are the biggest concerns of the interviewed companies. Seven of the eight companies mentioned these two aspects as barriers to the development of the sector in the country. The lack of training of the workforce was mentioned by 5 of the 8 interviewees and represents a difficulty in meeting the growing levels of customer demand. Half of the companies surveyed cited customers' lack of understanding of the differences between operators and carriers as one of the industry's problems. This confusion certainly contributes to increased pressure for price reductions. Customers' little knowledge of logistics and demand seasonality were two other barriers mentioned by operators.

Improving IT competence is perceived as the main opportunity for operators to improve performance. This perception is consistent with the investments in systems observed in almost all companies. It seems to be an obvious response to increased service demands and cost savings. It allows expanding services in certain situations, reducing costs and improving services. The establishment of alliances confirms the trend already mentioned in the bibliographic reference and seems to be a natural consequence of the pressure for an increase in the number of services and an increase in the demand for services in the sector.

The establishment of partnerships leads as a growth strategy for the interviewed companies, confirming research presented in the theoretical framework. This seems to be one more consequence of the pressure to increase the number and level of service, together with the need to reduce costs, which ends up inhibiting investment in assets.

The expected growth rate of companies is quite high, ranging from 0% to 100% for the next year. More than half of the executives who responded to the question think they will grow at around 20%. When asked about market opportunities, seven out of eight respondents mentioned e-commerce. Supply chain management (SCM) was cited by two companies.

CONCLUSION

The analysis of the results allows us to raise a series of hypotheses about the characteristics of the market for logistics service providers in Brazil.

1. There is a large discrepancy between the size of logistics operators in Brazil and in the United States.
   Comparing the average income of the logistic operators interviewed with those surveyed by Lieb (1999), a big difference is verified. While Brazilian operators reached an average revenue of R$ 57,6 million in 1999, in the case of the USA this value reached US$ 610 million in 1998.
2. There is a strong concentration of logistics operators in the Southeast region of the country
   The study identified a strong concentration of operators' warehouses in the Southeast region, and more specifically in the state of São Paulo, where all interviewed companies have at least one warehouse. This strong concentration seems to be resulting in distribution problems in the more distant regions, and for this reason several companies are looking to expand their warehouses to other regions.
3. Transport and storage, activities that gave rise to most operators, continue to be the services that most contribute to operators' revenues.
   Transport and storage, both in Brazil and in the United States, are the services that most contribute to the revenue of logistics operators. Despite this result suggesting great importance for these two types of services, North American executives claim that the most profitable services are those with the highest added value, such as supply chain management. Furthermore, it is the services with greater added value that best differentiate logistics operators from specialized service providers, such as transporters and storage companies.
4. The current Brazilian logistics operators seem to suffer from myopia with regard to the need to differentiate services by region and by industry.
   Research on the profile of demand indicated that most respondents do not perceive regional variations in the type of service demanded by customers. As most customers have their headquarters and most of their facilities in São Paulo, the types of services provided are the same for most branches throughout the country. According to the interviewees, it is impossible to draw a profile by region or even the client's industry. Service variations, when they occur, are on a case-by-case basis.
5. In the process of hiring logistics operators, the level of service works as a qualifier and the price as a classifier.
   When asked about the variable that most influenced customers' choice of a given logistics operator, seven of the eight respondents pointed to price. According to them, the increase in demands in terms of performance has made the service a qualifying factor, with price being the decisive variable for identifying the operator to be selected.
6. The services provided to e-commerce customers do not differ from those provided to other customers.
   The low volume of e-commerce business does not seem to encourage investments in specific structures for this new channel. All respondents stated that there is no differentiation in the provision of services for e-commerce. What has been happening is an operational improvement for the entire company, with the aim of accelerating processes and improving service levels.
7. The Brazilian logistics operators market is dominated by hybrid operators, that is, operators that have assets, but make heavy use of third-party subcontracting.
   All operators interviewed operated some of their own assets, whether warehouses or vehicles. The little experience and training in the development of logistics projects makes it almost impossible for operators based solely on management to survive. On the other hand, the ownership and operation of assets does not prevent a high degree of subcontracting, as observed by Berglund (1999) and confirmed by this research. Without exception, all 8 companies interviewed use third parties, road and air transport being those with the highest degree of outsourcing. According to those interviewed, the trend is towards increasing subcontracting, since growth strategies are strongly based on alliances with third parties.
8. Increasing competence in Information Technology is perceived as the greatest opportunity to improve services and reduce costs.
   While North American operators do not consider IT as a factor of great opportunity, in Brazil the interviewees classify it as the most important factor for the improvement of the sector. Most likely, IT adoption was very important for North American operators a few years ago. A high rate of use of systems such as WMS, EDI and Internet order management was observed. The answers referring to the use of scripts, ERP systems, and GIS suggest a low use of these systems.
9. Brazilian operators seem not to pay enough attention to the recruitment and training of manpower, especially at the managerial level, despite considering the quality of manpower one of the main barriers to the development of the sector.
   The quality of the workforce in the sector, a problem recognized by most respondents, is aggravated by the recruitment process and the small investment in training by operators. The vast majority of companies recruit their professionals in the sector itself, resorting very little to universities and consulting firms, as is the case in the US. Only 3 of the 8 companies interviewed have formal training programs for their employees. In the United States, most operators have formal training programs.
10. The need to reduce costs and improve performance is one of the main challenges to be overcome by logistics operators.
    Both in the research carried out by Lieb (1999) in the United States, and in this research, it was verified the existence of strong pressure from customers to reduce prices and improve services, simultaneously
11. Tax structure and deficiencies in the country's infrastructure are the biggest barriers to the development of logistics operators in the country.
    The two biggest problems for Brazilian logistics operators remain the complexity and cost of taxes, and transport and storage infrastructure. These are not US concerns. There, the biggest concerns relate to the costs of developing and implementing new information systems, low profitability and difficulties in recruiting and retaining qualified labor. The lack of customer discernment between a logistics operator and a carrier, as well as customers' little knowledge of logistics are sources of constant problems in contract negotiation.
12. E-commerce, as well as offering integrated services, are seen as the greatest opportunities for logistics operators in the future.
    Seven of the eight operators interviewed perceive e-commerce as one of the most promising opportunities for the growth of logistics operators. This same result was obtained by Lieb (1999), who found e-commerce to be the greatest opportunity for growth, according to the view of North American operators. However, there is a consensus that the current volume in Brazil still does not justify large investments, especially with regard to storage and separation technologies. The offer of integrated logistics services, mainly to support the management of supply chains, is the second biggest opportunity according to the interviewees' view.

NOTES

1. As cited in NEW STUDY SAYS 3PL SERVICES KEEP GROWING. Purchasing. June, p.89-90. 1999.

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