When assessing the state of the 3PL (third-party logistics) market, it truly does go without saying there is something for everyone, especially in terms of the needed, and varied, services 3PL’s provide…
By Jeff Berman
October 05, 2017
When assessing the state of the 3PL (third-party logistics) market, it truly does go without saying there is something for everyone, especially in terms of the needed, and varied, services 3PL’s provide on behalf of their shipper customers.
And it stands to reason that a premier source of these services comes in the form of the 2018 22nd Annual Third-Party Logistics Study published by Penske Logistics, Infosys Consulting, Penn State University, and Korn Ferry.
This study is well-known throughout logistics and supply chain circles and for good reason to be sure through its diligent examination of the global logistics marketplace mixed in with trends of note for both shippers and 3PLs.
Given that the report, which is available at http://www.3plstudy.com, checks in at more than 60 pages and is vast and detailed on myriad fronts, my objective in this space is to provide a wide-ranging, top-level overview of its many findings.
Two key trends highlighted in the report focused on the importance of the relationship between shippers and 3PLs and the importance of adapting to emerging technologies such as blockchain (a topic which received considerable interest and attention at the CSCMP Edge conference last week, where this study was released) and automation.
Each year, this study features a few key focus areas, and for this year’s study those areas included blockchain, automation/digitization, the logistics talent revolution required for shippers and 3PLs to drive technology advancements and a look at how shippers and 3PLs view their risk/resilience relationship.
Data captured in the study puts the importance of these focus areas into a sharper perspective, some of which show how certain things are still clearly in the early innings:
- 30% of 3PLs and 16% of shippers view blockchain as potential application while not having yet engaged in the technology;
- the impact of automation and how it is providing returns through things like digitized load matching and warehouse robotics led to 62% of 3PLs and 57% of shippers investing in automation/digitization, with the caveat that there are also challenges as indicated by 12% of 3PLs and 10% of shippers saying they do not have the in-house talent to develop, implement, and monitor these types of investments;
- technology continues to influence and re-shape the demands on the supply chain workforce as automation, digitization, and data collection continue to rapidly expand;
- 27% of shippers are seeking IT outsourcing services from 3PLs, up from 17% a year ago, while the percentage of shippers satisfied by 3PL IT outsourcing falling from 65% last year to 56% this year, with the study saying that may be due to higher expectations among shippers as technology continues to make gains or shippers are looking for enhanced analytical capabilities to help drive more effective supply chain decisions
- 73% of 3PL users and 92% of 3PL providers agree that 3PLs provide new and innovative ways to improve to improve logistics effectiveness, and 81% of 3PL users, or shippers, and 98% of 3PL providers agree that using 3PLs has contributed to improving services to the ultimate customers; and
- 39% of 3PL users and 81% of 3PL providers agree that collaborating with other companies, even competitors, can achieve logistics cost and service improvements
There are many more metrics that could have easily been cited and used above, but you can take a deeper dive into them by downloading the study.
While it gets repetitive and may sound “old,” nothing is likely to ever diminish the importance or relevance of a strong relationship between a 3PL and a shipper. As the world gets smaller largely through technological advents, and deadlines get shorter because of the need for customers to have something “now,” or as fast as possible, 3PL-shipper relationships, teamwork, and collaboration is as critical as ever. This year’s 3PL Study only further drives that point home.
About the author
Jeff Berman is Group News Editor for Logistics Management
, Modern Materials Handling
, and Supply Chain Management Review
. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman