From SCDigest's On-Target E-Magazine
- Nov. 19, 2013 -
Supply Chain News: Highlights from the 18th Annual Third-Party Logistics Study
Satisfaction of Shippers Continues to Rise, as Spend with Outsourcers Heads North; IT Gap Still There, but is Slowly Closing
SCDigest Editorial Staff
For the 18th consecutive year, Dr. John Langley of Penn State University has led the annual Third Party Logistics Study, released again this year at the CSCMP conference in Denver in late October.
The data, based on survey responses from hundreds of shippers and 3PLs worldwide, doesn't usually change all that much from year to year, but some overall trends are clearly discernable. In general, shippers and 3PLs seem to be more satisfied with their mutual relationships, outsourcing continues to grow, and slowly but surely shipper satisfaction with 3PL IT capabilities is even finally starting to make progress.
SCDigest Says: |
 |
| "While initial contacts are usually for three years, the report found that 75% of the time shippers renew with the same provider, the subsequent contracts are more likely to be for only one to two years. |
|
What Do You Say?
|
|
|
|
That said, there are still gaps in the how collaborative and strategic outsourcing relationships really are versus the avowed intentions of both sides.
Once again this year, the report highlights several major themes and trends, in addition to the basic survey responses that generally remain close to the same from year to year. For the 2014 report, those focus issues include "big data" opportunities in logistics, the rise of Africa in the supply chain, global trade management opportunities, and the need for different supply chain skills given the "new normal" of challenging economic conditions in developed markets.
This week, SCDigest will summarize highlights of the main body of the report this week. Next week, we will do the same for the focus areas of the 2014 report.
Spending on logistics outsourcing appears to continue to grow substantially faster than overall economic growth. The report cites data from Armstrong & Associates showing that 3PL revenues in North America, Asia, and Latin America grew 7.2%, 21.2% and 43.6%, respectively, in 2012 versus 2011, clearly much faster than GDP in those regions. 3PL revenues fell 2.8% in Europe, but that was in a climate of overall economic contraction in the Euro zone.
All told, respondents in this year's survey reported that about 44% of total logistics spend is made through outsourcers, up from 39% last year and 42% in 2011. There is always some "noise" in any such survey data, so the specific numbers in any given year should be taken with a grain of salt, but the general trend does seem to be a consistent rise in the percent of outsourcing spend.
But don't take that to necessarily mean spend is directly moving from internal to external. It could also be that the percent of a company's total logistics spend is moving to more global from domestic, and in general a higher percentage of global logistics is outsourced.
And while of course every year some companies bring once outsourced logistics services back in house (23% of shippers in this year's survey), the report notes that "In general, movement toward increased outsourcing generally outpaces movement toward insourcing."
As others have noted, in general there is also a trend to consolidate the numbers of 3PLs a company uses. 56% of shippers say they are working to reduce the total number of 3PLs with which they work.
90% of shippers say that there work with 3PLs have generally been successful, a number that continues to slowly rise over time. Meanwhile, an almost unanimous 97% of 3PLs consider their relationships with shippers generally successful.
(Distribution/Materials Handling Story Continues Below
)
|
