TECHNOLOGY STRATEGY AND IMPLEMENTATION Top Challenges Shippers Face
Top Challenges 3PLs Face
TOP CHALLENGES 3PLS FACE
WHAT IS 3PL PART Poor custom
Cutting transport costs
Rising operational costs
73 %
41 % Business process improvement 33 % Improving customer service 28 % Supply chain visibility 25 % Managing inventory 19 % Reducing labor costs 19 % Finding, training, retaining qualified labor 16 % Expanding to new markets via sourcing 14 % Vendor management 14 % Technology strategy and implementation 13 % Risk management/contingency planning 13 % Ecommerce 12 % Expanding to new markets via selling 12 % Corporate social responsibility (including sustainability) 9 % DC network optimization 6 % Reducing assets and/or infrastructure 6 % Regulations/security/other compliance issues 5 %
Technology investment
62 %
Failed expec
Finding, training, retaining qualified labor 57 % Finding, retaining customers 45 % Capacity 42 % Compliance/regulations 40 %
Cost
More compe 7 % Loss of cont 5 % Cultural diss 2 %
Corporate social responsibility (including sustainability) 37 % Contingency planning/risk management 33 % Meeting customer service requirements 33 % Making a profit 26 % Growth management 23 %
SHIPPER
Service
Price
92 %
87 %
STRATEGI MANAGE DC network
87 %
Global coverage 6 %
Supply chain
SPECIAL SERVICES 3PLS OFFER The top challenge 3PLs face today stems from Logistics/transportation consulting
89 % Technology investment can help 3PLs and 69 % shippers bounce back from supply chain disruptions. 66 %
Nearshoring
Direct to store rising operational costs, an issue that 73% of our 3PL
4PL/LLP par
Sustainability/green logistics respondents cite this year, compared with 62% in 2023. On Import/export/customs the other side of the ledger, 45% of 3PLs mention finding and retaining customers
Lean best p
Strategic so
64 % Reverse logistics/product lifecycle management 63 % Direct to home 45 % Contingency/crisis planning 43 % Labor management 38 % Marketing/customer service/call center 37 % Foreign Trade Zone 35 % Security analysis 23 % as a challenge, up by 12 points since 2023. So it’s no surprise more 3PLs this year face challenges in making a profit—26% compared with 16% in 2023. As 3PLs understand well, one key to managing all of those challenges lies in technology. Technology investment is the second-biggest challenge that 3PLs face this year, cited by 62% of 3PL respondents. Another issue of serious concern is finding, training, and retaining qualified labor, mentioned by 57%. 3PLs continue to feel less pain about transportation capacity than during the worst of the COVID-induced crunch. This year 42% of respondents cite capacity as a challenge, compared with 46% in 2023 and 80% in 2022. While only 13% of shippers name risk management and contingency planning as a challenge, 3PLs are more heavily focused than their customers on things that could go wrong. Among 3PLs, 33% name that issue as a challenge.
Intermodal t
One year ago, shippers were giving a collective sigh of relief. Business was returning to normal after the massive disruptions of the pandemic. For each potential challenge we named in our 2023 survey, fewer shippers labeled it a major concern than in the previous year. But in 2024, shippers are worried again. For example, while just 37% cited cutting transportation costs as a top challenge in 2023, this year 41% are seeking ways to spend less. Concern about business process improvement has increased by 8 points since 2023; concern about improving customer service has gone up 10 points; and concern about supply chain visibility has gone up 12 points. Even some of the less pervasive challenges draw more concern this year. For example, in 2023, only 8% of shippers cited risk management and contingency planning as a major challenge. In 2024, as war, climate change, and other factors pose new risks for supply chains, that number stands at 13%.
Managed te
Demand-dri
Co-locating,
Supply chain
July 2024 • Inbound Logistics 81
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