STRATEGIES SHIPPERS AND 3PL USE TO MANAGE CHALLENGES
SERVICES SHIPPERS BUY Motor freight 82% Expedited, small package deliveries 74% Logistics technology, TMS, WMS 72% Third-party logistics solutions 69% Warehousing, fulfillment, DC services 64% Air freight, expedited 54% Ocean / ocean intermodal 44% Rail / intermodal 44% Global shipping, freight forwarding solutions 40% Port, site, facility selection 38% Materials handling equipment, solutions 35% Transportation equipment 16%
4PL/LLP partnerships 53% Supply chain design 52% DC network optimization and realignment 48% Lean best practices 48% Strategic sourcing strategies 47% Nearshoring or reshoring 43% Managed technology services 40% Intermodal transportation 38% Demand-driven logistics 36% Co-locating, collaborative distribution 30% Supply chain decentralization 26%
To keep supply chains operating smoothly, 53% of shippers and 3PLs use a fourth-party logistics provider (4PL) or lead logistics provider (LLP), having a single company coordinate the services of numerous partners. Nearly as many—52%—use supply chain design to manage challenges. Strategies focused on design can involve everything from where shippers source goods, what modes they use to transport them, what levels of inventory they keep, and how they deliver those goods to customers. Shippers and 3PLs also called out several strategies that are subcategories of supply chain design. The most popular of those is distribution center (DC) optimization and realignment, a strategy used by 48% of shippers and 3PLs. Nearly as many—47%—call upon strategic sourcing strategies, collecting and analyzing data on factors such as vendor performance and supply risk to inform sourcing decisions. Forty- eight percent mentioned that they use lean best practices. This year’s survey points to two significant strategic changes. One concerns where companies source products. In 2022, 43% of shippers and 3PLs told us they use nearshoring or reshoring to resolve some of their challenges, an 11% increase over 2021. At the same time, the principle of demand-driven logistics has become less prevalent. Thirty- six percent of respondents cited it as a strategy this year, down from 50% in 2021.
With access to a broad range of carriers at competitive rates, 3PLs are the go-to source for all manner of transportation services. Motor freight tops the list: 82% of shippers in our survey purchase over-the-road transportation through their 3PLs. Nearly three-quarters of shippers turn to logistics partners for expedited transportation and small package deliveries. Fewer shippers purchase other modes of transportation through their 3PLs, but the numbers are still significant: 54% buy air freight or expedited services, 44% buy ocean or ocean intermodal transportation, and 44% buy rail or rail intermodal services. Also, 40% obtain global shipping or freight forwarding solutions through their 3PLs. Shippers also rely on 3PLs to manage inventory and distribute product, often gaining broader reach, economies of scale, and flexibility when they use a logistics partner’s assets. Among shippers who participated in the survey, 64% said they buy warehousing, fulfillment, and/or DC services from 3PLs. Besides physically moving goods through the supply chain for shippers, 3PLs often provide information technology (IT) to support shippers’ operations. Shippers could purchase transportation management systems (TMS), warehouse management systems (WMS), and other logistics solutions from vendors that operate strictly in the IT sphere. But as they implement technology for their own operations, many 3PLs are able to share those capabilities with shippers as well. In 2022, 72% of shippers said they buy logistics technology from 3PLs.
What’s the ideal number of 3PLs a shipper should work with at one time? “It depends,” said 42% of shippers in our survey. In some circumstances, a shipper might benefit from the varied strengths of dierent partners. In others, it could be best to have a single, strong partner to serve all needs and respond to all questions. Thirty-eight percent of shipper respondents told us it’s always best to work with more than one 3PL. Only 20% prefer to rely on a single logistics partner. SHOULD SHIPPERS PARTNER WITH ONE OR MORE 3PLs?
20% JUST ONE
42% IT DEPENDS
38% MORE THAN ONE
90 Inbound Logistics • July 2022
Powered by FlippingBook