Data-driven shipper-3PL relationships add value to supply chains

In the modern supply chain, where fluctuating capacity, increased shipper demands and hard-to-predict disruptions create a volatile decision-making environment, shippers and third-party logistics providers (3PLs) are increasingly using analytics to improve efficiency, according to the results of the “2017 Third-Party Logistics Study,” which was released this morning at the Council of Supply Chain Management Professionals (CSCMP) annual conference in Florida, U.S.

The study – the 21st annual report conducted by Capgemini Consulting, Penn State University and Penske Logistics – reinforces the long-held belief that strategic relationships between shippers and 3PLs have a positive effect on efficiency and value within supply chains.

The 2017 report revealed that 91 percent of 3PL users and 97 percent of 3PL providers said their relationships are “successful” and are “yielding positive results.” This is an increase from five years ago, in the 2012 study, when 88 percent of 3PL users and 94 percent of 3PL providers praised their own relationships.

“Data-driven decision-making is certainly an increasing trend in the supply chain,” said Tom McKenna, senior vice president of engineering and technology for Penske Logistics. “Among the biggest challenges that come with increased visibility and more data is determining how to best use that information to drive improvements that benefit the customer.”

Three-quarters of shippers surveyed, along with 93 percent of 3PL providers, said the use of 3PL services has contributed to overall logistics cost reductions, and 86 percent of shippers said the use of 3PLs has contributed to improved customer service. Also, 73 percent of shippers reported that 3PLs offer “new and innovative ways to improve logistics effectiveness.” Nearly three-fourths of shippers (71 percent) said real-time analytics from 3PLs help them better understand shipping alternatives.

In many of these annual studies, shippers have increasingly relied on the expertise of 3PLs to provide logistics services, outsourcing the repetitive activities that are more transactional or operational. This year’s survey, however, indicated that even strategic and customer-facing services are being turned over to 3PLs. For example, 19 percent of shippers in the 2017 study said are using supply chain consultancy services, compared to 11 percent in the previous year’s report. Also 17 percent of shippers in the latest study are utilizing IT services, compared to 11 percent the year before.

“This year’s report paints a new picture about what successful collaborations look like,” said Frank D. Monte, principal, strategy and operations, for Capgemini Consulting. “Shippers continue to push their 3PLs to become more innovative in the areas of logistics technology and advanced analytics, while also developing the appropriate capabilities for geographic expansion.”

Much of the expertise gained by 3PLs has come from mergers and acquisitions (M&A), which fill gaps in service areas, the study found. The value of M&A deals nearly doubled from 2014 to 2015, growing from US$87 billion to $173 billion. Cross-border e-commerce transaction values have quadrupled from 2014 to 2015, soaring from $28 billion to $115 billion over that time period.

For more on 3PL innovations and forming strategic partnerships, join us for networking and discussion at Air Cargo World’s new ELEVATE 2016 Conference, Oct. 10, in Miami. Click here for details.

  Like This Post
Current Issue Magazine Cover
Sign Up Email List