Monday 20th Nov 2017 - Logistics Manager

Time to get closer to your 3PL?

Seven out of ten users of logistics services reckon that using third party logistics providers has contributed to overall logistics costs reductions, according to the 20th annual Third Party Logistics Study.

Not only that, 83 per cent of customers said the use of 3PLs had contributed to improved customer service.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

However, the survey suggests that logistics providers are significantly more enthusiastic about the benefits. 85 per cent of 3PLs said the use of 3PL services had contributed to overall logistics cost reductions, and 94 per cent said use of 3PLs had contributed to improved customer service.

The study is the work of Capgemini, Penn State University, Penske Logistics and Korn Ferry International and is based on information from 267 respondents involved in global logistics operations notably in the US, Europe and Asia. About half the respondents were users of logistics services, while 40 per cent were logistics providers. The other 12 per cent were defined as non-users.

While the results are generally fairly encouraging for 3Pls, for example, 73 per cent of users said they were increasing their use of outsourced logistics services. That’s up from last year’s figure of 68 per cent.

But the number of companies taking logistics operations back in house has also risen – from 26 per cent last year to 35 per cent this year. And there is also evidence that companies are reducing the number of 3PLs that they are using. Some 57 per cent said they are consolidating compared to 53 per cent last year.

The report suggests that both 3PLs and shippers are becoming more proficient at what they do to enhance the quality of 3PL relationships. Most 3PLs are achieving a better focus on what they do best, and on what core competencies they can provide to enhance the functioning of customers’ supply chains.

Nevertheless, it is clear that there is no room for complacency. Tactical buying is still a major factor in the market – in fact 37 per cent of buyers described themselves at “tactical” as opposed to 43 per cent who regarded themselves as “strategic”. The remaining 20 per cent had a foot in both camps.

This all suggests that there is scope for improvement in the relationships between users of logistics services and third party logistics providers. But who will make the first move?