Sunday 17th Dec 2017 - Logistics Manager

Time to rethink 3PL relationships

The relationships between companies and their third party logistics providers have always been complex, often prone to misunderstandings, and occasionally fraught.

It’s not uncommon to hear customers complain that logistics providers can’t meet their increasingly sophisticated needs. On the other hand, 3PLs say that customers are too often interested only in price making it difficult to develop sophisticated solutions.

A new report from Capgemini suggests that the relationships between companies and their 3PLs are taking on a new significance as customers seek to drive value and competitive differentiation from their choice of logistics provider.

The global study of 2,300 shippers and logistics service providers, produced in cooperation with Penn State University, Korn/Ferry International and Panalpina, found that many shippers lacked confidence in their 3PLs’ ability to operate at the strategic level necessary for disruptive innovation. And, while 89 per cent of 3PL respondents believed they were ready to innovate, just 53 per cent of shippers agreed.

“Many of today’s 3PL-shipper relationships are not set up in a way that fosters innovation,” according Dan Albright of Capgemini.  “Shippers commonly engage with 3PLs on a very tactical level only, so their 3PL partners lack any real visibility or insight into their organisation and its challenges.

“It takes truly collaborative, strategic relationships among all partners involved to develop the kinds of disruptive innovations it will take to solve the challenges facing today’s supply chains. This will require a considerable change from the way that many 3PL-shipper relationships are structured today.”

Easier said that done, of course. It’s always difficult to challenge entrenched attitudes – particularly if the relationship just about works.

But, as this study highlights, companies are increasingly seeking to mitigate the kinds of supply chain disruptions that we have seen over the past couple of year.  Stronger partnerships between shippers and their 3PLs can only benefit both sides.