State of the Market: Third-Party Logistics

State of the Market: Third-Party Logistics Relationships Focus on Adding Value

Third-Party Logistics

In the past, shippers and their third-party logistics providers stuck to a uniformly transactional relationship. This relationship was one of utility for both parties, and lacked any true value or longevity.

According to the 2017 21st Annual Third-Party Logistics Study, the 3PL market is moving towards partnerships that are meaningful and add value for both the shipper and the 3PL provider.

As of this year, 91% of Third-Party Logistics users and 97% of 3PL providers reported that their business relationships are successful and yield positive results. This level of satisfaction within partnerships is bound to permeate into other areas of the business.

In accordance with this transition, most shippers and providers said that the use of 3PL services has contributed to overall cost reductions and improved customer service. With costs declining and service increasing, there is more room for innovation and improvements to logistics that increase its effectiveness and prove beneficial to the industry as a whole.

The decrease in IT-intensive and customer-facing activity outsourcing doesn’t mean that outsourcing rates are declining overall. The market continues to see an increase in outsourcing, even in these categories.

The 2017 study reveals that 19% of shippers are taking advantage of supply chain consultancy services, compared to 11% last year.

17% of shippers are still utilizing IT services, a 6-point increase from last year’s 11%.

In the wake of grim-looking market statistics, 3PLs are resilient as they continue to improve their technology in a manner that increases data-driven decision-making, something that shippers find extremely valuable as of late.

Benefits of Using a 3PL

  • Reduced total delivered cost for your customer
  • Local expertise in new markets
  • Improved customer service through shorter shipment times
  • Reduced inventory costs through better management
  • Cost benefits through volume shipping discounts
  • Improved focus on core competency
  • Increased shipment visibility
  • More scalable logistics operation and cost model
  • Improved variety of technology and service
  • Risk reduction
  • Increased expertise in supply chain security

We can certainly receive, store and ship your pallets of merchandise. We can do so much more.