Inbound Logistics | July 2022


TOP CHALLENGES 3PLs FACE Capacity 80 % Finding, training, retaining qualified labor 70 % Rising operational costs/access to capital 63 %

Cutting transport costs 70 % Finding, training, retaining qualified labor 55 % Business process improvement 51 % E-commerce 45 % Improving customer service 38 %

Technology investment 46 % Compliance/regulations 32 % Supply chain disruption/contingency planning/risk management 32 % Growth management 29 % Meeting customer service requirements 27 % Corporate social responsibility (including sustainability) 24 % Finding, retaining customers 23 %

Managing inventory 38 % Supply chain visibility 36 % Selling in new markets 34 %

Risk management/contingency planning 23 % Technology strategy and implementation 22 % Sourcing in new markets 21 % Reducing labor costs 20 %

Making a profit 10 % Global coverage 8 %

Although the transportation capacity crunch has eased somewhat since 2021, freight rates remain high. Combine that with the challenges of an overall inflationary market, and it’s obvious why shippers are under pressure to reduce expenses. Cutting transportation costs—not just finding lower rates, but controlling the overall costs involved in moving freight—is by far the biggest concern for shippers who responded to this year’s survey. Seventy percent named that as a crucial challenge, up from 50% in 2021. The second most pressing challenge is finding, training, and retaining qualified labor in a tight market, cited by 55% of respondents. But the challenge that saw the biggest jump since 2021 was business process improvement. Last year, 37% of shippers named that as an important challenge, while in 2022, the number is 51%. Another issue that has moved up the list of shipper concerns is improving customer service, cited by 38% of shippers in 2022, compared with 28% in 2021. And while only 14% of shippers say they face challenges in the area of corporate social responsibility, including sustainability, that is 10 points higher than the 4% who pointed to that issue in 2021. Managing big data 19 % Vendor management 16 % Corporate social responsibility (including sustainability) 14 % Compliance issues (regulations, security) 14 % DC network optimization 10 % Reducing assets and/or infrastructure 9 %

Despite recent reports that it’s easier to find space on a truck or ocean vessel these days, capacity remains the top challenge for 3PLs in 2022, cited by 80% of those who responded to the survey. And even more so than shippers, 3PLs struggle with finding, training, and retaining qualified labor. This year, 70% of 3PLs named that as an important challenge. But when it comes to finding and retaining customers, the picture has improved a great deal for 3PLs since 2021, when 74% of respondents named this as a challenge. This year the number is just 23%. Also, far fewer 3PLs are struggling with growth management: 29% in 2022, down from 78% in 2021. While capacity and talent are the issues most likely to challenge 3PLs, two others stand out because of how much they have climbed the list of top challenges since last year. In 2021, only 10% of 3PLs named rising operational costs and access to capital as an important challenge. This year, 63% are concerned about how to fund their operations. And while just 10Š of 3PLs cited technology investment in 2021, over the past year that has become a concern for 46% of respondents. Given all the other challenges they and shippers grapple with today, it stands to reason that more 3PLs are looking to implement technology to make operations more eŒcient and support smarter supply chain strategies.

July 2022 • Inbound Logistics 87

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