Survey Demonstrates Many Areas Where 3PLs Are Between a Rock and a Hard Place

A total of 83 percent of executives from third party logistics providers (3PLs) who responded to a survey by market research firm SimplyDIRECT stated that reducing costs to remain competitive is the most important factor driving their business operations.

Yet a whopping 94 percent of those executives identified accurately understanding profitability by customer as a challenge that is impacting their business success. Thus, they are stuck between a rock and a hard place — having to reduce costs, but not knowing how their actions might affect profitability.

The Survey
JDA Software sponsored a survey conducted by independent market research firm SimplyDIRECT to learn how 3PL executives view the 3PL marketplace, their customers and challenges.

The survey received more than 100 responses from 3PL executives across Europe and North America.

The respondents supported a wide range of industries (Figure 1) and ranged from small (less than $10 million annual spend on transportation or labor) to large (more than $100 million annual spend on transportation or labor).

Most — 94 percent — support more than one customer per facility, with 74 percent managing the operational complexities of supporting more than 10 customers per facility.

The SimplyDIRECT/JDA 3PL survey demonstrates many areas where 3PLs are between a rock and a hard place.

• 3PLs must reduce costs, but aren’t sure of the impact on profitability
• 3PLs want to provide differentiated services, but are struggling just to conform to customer requirements
• 3PLs know that supply chain visibility is important, but may not have the technology to provide it
• 3PLs want to share continuous improvement gains, but don’t have a basis for valuing the improvements
• 3PLs know that they must be agile and flexible, but may be limited in this regard by their technology

The good news is that technology to help 3PLs get out from between the rock and a hard place is available today.

It can be quickly and efficiently deployed in the cloud to begin meeting customer needs and start earning return on investment faster. And cloud service contracts can be aligned with customer contracts to limit long-term exposure and risk. It’s a solution to make everyone happy.

This report summarizes and analyzes what these executives revealed and provides actionable recommendations for how 3PLs can address their greatest challenges today.

More on Third-Party Logistics