GOODQUESTION
THE MOVEMENT TOWARD OUTSOURCING IS MIXED and
E-Commerce Acceleration
dependent on the organization, its capabilities, and desire to control its destiny. For businesses that have the capabilities and resources needed to insource, they are doing so. For other organizations, we’re seeing a trend toward outsourcing to acquire the scale, skill, and flexibility needed to withstand the volatility of the market. –Matt Comte Operations Transformation Practice Leader, PwC SHIPPERS HAVE IMPROVED THE FLEXIBILITY AND RESILIENCY of their supply chains. With shortages and capacity constraints becoming a daily issue, using a 3PL is the most effective solution. Instead of relying on their own assets, shippers are partnering with brokerages to provide the capacity needed. –Perry Falk SVP, Carrier Operations Nolan Transportation Group IN THE SHORT RUN, YES. IN THE LONG RUN? TO BE DECIDED. Following the initial shock of COVID, companies increased their use of 3PLs to maintain supply by any means necessary—most even willing to take a hit financially. As supply chain issues prolong, however, and as the pressures of inflation mount, staffing up with internal logistics professionals is likely to be a more systematic and cost- effective response.
E-commerce growth has driven the outsourcing of logistics. Retailers were limiting investment in the supply chain to focus on product and marketing so
when growth spiked in 2020, there was not enough internal talent, process, or capacity. Using a 3PL supported growth while preserving customer experience and maintaining focus on product. –Laura Ritchey EVP and COO, Radial With the massive increase in e-commerce volume , the expectation of consumers to immediately receive their goods has only grown. Small and mid-sized businesses simply cannot manage the logistics needed to match the speed that massive players like Amazon can, so they’ve increased their work with 3PLs. –Josh Dunham Co-founder and CEO, Reveel
THE PANDEMIC ACCELERATED A NUMBER OF TRENDS , including logistics outsourcing. Outsourcing allows shippers to control costs and to increase certainty. By aggregating the purchasing power of their customers, large logistics companies are able to use their scale to deliver better outcomes.
UNDOUBTEDLY . The pandemic impacted the role of logistics professionals. As they’ve contended with major swings in demand, inventory, freight rates, and labor markets, the need for fast, flexible solutions and additional support was paramount. Outsourcing has been a critical way to fill a gap—in people, technology, capacity, or expertise—quickly. And we’ve seen more customers looking for everything from forecasting and RFP management to TMS technology, on-site support, and fully outsourced solutions. –Ben Steffes VP, CTM & Managed Services Coyote Logistics
–JJ Schickel CEO, Omni Logistics
3PLs HAVE STEPPED IN as flexible outsourcing partners, reducing costs and improving visibility and efficiency. Outsourcing logistics has helped companies focus on their core competencies. –Sunil Kardam Analytics Head, Supply Chain and Logistics, Gramener
–John Frechette Director, Founder Sourced Economics
DRAMATICALLY INCREASED. Prior to the pandemic, many companies didn’t have a true understanding of their supply chain capacity and didn’t know how inefficient their operations were. Problems stemming from manual processes, labor constraints, and ineffective systems were exacerbated, and companies turned to 3PLs for faster, more reliable, and less costly distribution.
Have a great answer to a good question? Be sure to participate next month. We want to know: What’s your best tip for retailers pivoting to direct-to-consumer fulfillment? We’ll publish some answers. Tell us at editorial@inboundlogistics.com or tweet us @ILMAGAZINE #ILGOODQUESTION
–Errol Gonzales Account Executive Zethcon, A Made4net Company
July 2022 • Inbound Logistics 13
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