Logistics Study Reflects Changing 3PL Role
The 2018 22nd Annual Third-Party Logistics Study reveals current insights and market research around third-party logistics (3PL) provider roles and relationships. Respondents for this year’s study include shipping managers, directors, vice presidents, and executives as well as 3PL executives and managers from various industries, including manufacturing, retail and consumer products, food and beverage, automotive, business and logistics, and more.
Key takeaways
The majority of shipper-3PL relationships are positive as 99% reported theirs as being generally successful. Supply chain management (SCM) is recognized as a crucial factor in business success on a greater scale, and company leaders are acknowledging their needs for experience and knowledge in this arena. According to the study, “Conversations surrounding supply chain have made their way into the boardroom and an effective supply chain can be a key differentiator between businesses in all sectors.” This shift is leading to more meaningful collaboration between 3PLs and their customers with respondents citing transparency, visibility, and information-sharing as crucial to successful partnerships.
The expanding role of 3PLs
Of particular interest is the growing dependence company executives have on 3PLs for not only transactional and operational services but also information technology (IT) services. “The percentage of users indicating the outsourcing of information technology services increased to 27% in the 2018 study from 17% in the previous year.” Technology, real-time data, and visibility across the supply chain are crucial to remaining agile in a complex global market. Supply chain relationships are evolving: 3PLs and shippers are becoming business partners, working together to develop innovative solutions, streamlining operations, improving service levels, increasing security, and optimizing supply chain operations.
As technology advances, 3PLs are better equipped to serve shippers as well. For example, up-to-date information and visibility are empowering 3PLs to hedge potential risks and address otherwise unforeseen problems before they become major obstacles. To best avoid uncertainties, it is important both parties invest in necessary resources for taking corresponding actions formulated by 3PL data.
Shippers are facing many demands and, as a result, are increasing their 3PL expectations in terms of help and capabilities. Some of the challenges they face are due to
- increasing and quick delivery demands,
- the need for lean inventories, and
- shorter product life cycles.
To better manage demand, more shippers are choosing to increase logistics spending and outsource more responsibilities. In fact, 61% of shippers plan to increase their outsourced logistics this year. Room for improvements will always exist, but this year’s results reveal many reasons for shippers and 3PLs alike to be optimistic in their supply chain partnerships.
According to the report, “For more than 20 years, the Annual 3PL Study has found that shippers increasingly leverage what 3PLs offer, maximizing the supply chain, driving out costs and creating value. This year, the number of shippers reporting that 3PLs helped them lower costs has increased, as has the number of shippers reporting that 3PLs have contributed to improving services to the ultimate customer.” This year’s study confirmed that, in today’s market, a well-developed relationship with a trusted and experienced 3PL can offer you and your company market advantage.
[cta]As a global business partner, nVision Global professionals provide industry-leading information management services necessary to help clients maximize efficiencies within their supply chains. In addition, the nVision Global CollaborationTM Web Portal enables partners the transparency they need to collaborate and succeed.[/cta]
