SCDigest Editorial Staff
The perception of 3PL IT capabilities has risen over each of the past three years, substantially reducing this "IT performance gap" - though still only 54% are satisfied with 3PL it capabilities.
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For the 15th year, Dr. John Langley of Georgia Tech, the consultants at Capgemini, and participants from other sponsors released the annual 2010 Third-party Logistics report, commonly called the "3PL study" by many in the supply chain and logistics industry. Based on survey data from over 1100 shippers and 3PLs, the report covers a wide variety of data and insight on the use of outsourced logistics providers and the relationships between the shippers and 3PLs on a global basis. This year, the report also had focused sections on the use of total landed cost (TLC) calculation and outsourced logistics practices in the life sciences and "fast moving consumer goods" sectors.
The full reported can be downloaded here: 2010 3PL Study.
As with most everything else, third-party logistics was impacted by the deep global recession of 2009. 3PL revenue in the US dropped from $127 billion in 2008 to $107 billion last year according to the report, citing data from Armstrong Associates. That's not unexpected, given the sharp drops in unit volumes and the steep decrease in transportation costs; perhaps more interesting is the fact that there was also a significant fall in the percent of total logistics costs spent through 3PLs.
Respondents said 42% of their spend was now with outsourcers, down 10-15% over recent the data in recent years. The report surmises that with lower logistics volumes shippers pared back on the use of outside logistics providers more aggressively than they did their own internal operations.
Again this year, the survey found the use of 3PLs as a percent of total logistics spend was lowest in North America at just 35%, versus 41% in Latin America, 49% in Europe, and 51% in Asia.
An average of 24% of shipper respondents say they are returning to insourcing some of their logistics activities, and 36% of 3PL respondents observe that some of their customers are insourcing certain logistics activities.
Nearly one-half (46%) of shipper respondents are consolidating the number of 3PLs they use, and 73% of 3PL s feel that customers in general are reducing or consolidating the number of 3PL relationships they maintain.
Shippers Generally Satisfied - but Looking for More
Again this year, the report found that overall, shippers are very satisfied with their 3PL relationships, with 89% of them saying they were generally satisfied with those relationships. Here, North America led the way, with a satisfaction rate of 92%, a few percentage points above the other three global regions. An astounding 97% of 3PLs were generally satisfied with their client relationships. Along the same lines, 72% of shippers agree their 3PL s are sufficiently agile and flexible to accommodate their current and future business needs and challenges.
While a strong majority of shipper respondents (68%) believe that 3PL s provide them with new and innovative ways to improve logistics effectiveness, that is far short of the 95% of 3PLs which believe they provide their clients with that high level of innovation.
The report notes that in this second year that 3PL respondents were part of the survey, "There is a persistent gap between the ratings that shipper respondents assign to various aspects of the 3PL-shipper relationship and somewhat more positive evaluations provided by the 3PL respondents themselves."
(Distribution Article - Continued Below)