If you were wondering where the recent mergers and acquisitions among third-party logistics service providers (3PLs) were leading, now you know.

Last month, communications and networking provider Nortel Networks agreed to turn over some logistics operations to Kuehne & Nagel, the international logistics giant based in Shindellegi, Switzerland. The deal marries the strengths of K&N's 90-country network of international logistics services with the domestic warehousing and distribution expertise of USCO Logistics, which K&N bought last year.

The 3PL will act as a "lead logistics provider," managing dozens of Nortel's logistics and transportation service providers worldwide. It will also hire 95 Nortel employees in 18 countries. The agreement, which does not involve the sale of physical assets, essentially is a transfer of personnel, expertise and information.

To manage a project of this scope, Kuehne & Nagel has established a new division called KN LeadLogistics, which will be independent of other 3PL organizations within K&N. It will be responsible for import/export processes, inventory, transportation, warehousing and distribution for finished goods moving from Nortel's manufacturing facilities to customers in several countries.

KN LeadLogistics will oversee the transition to a single IT infrastructure to provide better visibility for Nortel's outbound orders. The 3PL also will develop "global metrics" to identify best practices and foster knowledge sharing among Nortel's logistics service providers.

The Nortel-Kuehne & Nagel agreement is an example of a multinational manufacturer's pressuring its 3PLs to provide global visibility of inventory, orders and shipments, observes Dr. Robert C. Lieb, professor of supply chain management at Northeastern University in Boston. Demand for "one-stop shopping" that combines both international and domestic expertise is behind many of the recent mergers of freight forwarding- and warehousing-based third parties, he says.

The Nortel deal is unique, but the pressures of globalization have created other models for 3PL-customer relationships. One example is the Vector SCM joint venture between General Motors and 3PL Menlo Worldwide. Another is that of global trade management software vendor Vastera, which offers a service that manages customers' export activities. What's different about this approach is that the provider is a software company rather than a freight forwarder or export management company, illustrating shippers' growing demand for integrated information services worldwide.