Subscribe to our free, weekly email newsletter!


Annual 3PL study takes a deep dive into myriad facets of outsourced logistics

By Jeff Berman, Group News Editor
October 07, 2011

As shippers supply chain needs continue to evolve over time, so do the capabilities of those providing third-party logistics (3PL) services. This was a major takeaway of the recently released 2012 Third-Party Logistics Study: The State of Logistics Outsourcing,” by Capgemini Consulting, Penn State, Panalpina, and Heidrick & Struggles.

Findings from the study’s were released at last week’s Council of Supply Chain Management Professionals Annual Conference in Philadelphia, and data was based on feedback from 2,258 logistics executives and shippers (1,561 shippers and 697 3PLs) in North America, Europe, Asia-Pacific, and Latin America.

Chief among this year’s findings was that 64 percent of the study’s respondents are using more 3PL-based services, with 42 percent of total logistics expenditures allocated for outsourcing—matching last year’s data—and another 58 percent citing how they are reducing or consolidating their 3PL partners, reflecting how the uncertain nature of the global economy continues to impact buyers of logistics services.

“The current state of the 3PL market as based on this data shows that it is kind of a fragile business these days,” said John Langley, clinical professor of supply chain management at Penn State University. “There are various forces impacting supply chains.”

This year’s study looked at various subsets of 3PL services, including growth in emerging markets while traditional markets are slowing; challenges facing 3PLs in the electronics sector, and the importance of talent management for 3PLs.

Some of the key findings based on respondent feedback for these areas were:
-80 percent of shippers and 77 percent of 3PLs surveyed conduct business with or within and emerging economy that are experiencing rapid growth through industrialization;
-59 percent of electronics shippers view price pressure to reduce operating costs as their top challenge, with 28 percent maintaining 3PLs can help them in this regard; and
-shippers and 3PLs most highly value operational execution (51 percent and 60 percent, respectively) followed by people management and development skills (54 percent and 43 percent, respectively), among others.

The survey once again also focused on what it describes as an “IT Gap,” which it defines as shipper’s opinions on whether they feel information technologies are a necessary element of 3PL expertise and whether they are satisfied with their 3PL providers’ IT capabilities.

The IT gap in the earlier years of this study was wide, but in recent years it has narrowed, with 93 percent viewing IT as a necessary element of 3PL expertise and 54 percent of shippers indicating they are satisfied with 3PL IT capabilities.

“We have observed over the last few years that the IT gap appears to be closing,” said Langley. “And we are fairly confident that the ability of 3PLs to manage…IT services has been enhanced every year, coupled with the ability of shippers to handle available technologies has also improved. The bar keeps getting higher and higher and the idea that the IT gap may never completely close is acceptable.”

When looking at the outsourced logistics services, shippers turn to 3PLs for, the survey found that the top five were: international transportation (78 percent); domestic transportation (71 percent); warehousing (62 percent); freight forwarding (57 percent); and customs brokerage (48 percent).

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

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. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

Article Topics

News · 3PL · Logistics · CSCMP · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA