3PL study highlights growth in outsourcing

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Logistics outsourcing has increased in the past year, but spending on third party logistics services overall has decreased, according to the 15th annual third party logistics study.

The study, by Capgemini in cooperation with the Georgia Institute of Technology and Panalpina, is based on some 1,900 responses from shippers and logistics service providers in North America, Europe, Asia-Pacific and Latin America.

It found that significant uncertainty about the global economy had impacted spending, with an average of 11 per cent of company sales revenues devoted to logistics, and an average of 42 per cent of that directed to the outsourcing of logistics services, a decrease of 10 to 15 percentage points from recent years.

At the same time, 65 per cent of shippers reported an increase in the use of outsourced logistics services relative to total logistics services, suggesting that while outsourcing may have increased, expenditure on 3PL services overall has decreased.

There was improvement in the shipper-3PL relationship, with 89 per cent of shipper respondents overall viewing their 3PL relationships as generally successful and 68 per cent indicating that 3PLs help provide them with new and innovative ways to improve operations.

However, the report’s findings show that shippers continue their tendency to outsource transactional, operational and repetitive activities and less so those that are strategic, customer-facing and IT-intensive despite a large proportion of 3PLs offering more advanced services.

Dr C John Langley Jr, professor of supply chain management, Georgia Institute of Technology, said: “Many shippers regard logistics and supply chain management as key components of their overall business success. Increased use of outsourcing and high satisfaction levels suggest that 3PLs can certainly take some credit for helping shippers to weather the economic storm.

“Despite a challenging environment, 3PLs have an opportunity to continue to mature and grow by offering an increasing number of value-added services for shippers.”

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