26
Growth management 23 %
STRATEGIES SHIPPERS AND 3PLS USE TO MANAGE CHALLENGES DC network optimization and realignment 57 %
Global coverage 6 %
Top Reason for a Failed 3PL Partnership, According to Shippers 57 % Supply chain design Nearshoring or reshoring WHAT IS THE TOP REASON FOR A FAILED 3PL PARTNERSHIP? SHIPPERS SAY:
Special Services 3PLs Oer TOP CHALLENGES 3PLS FACE SPECIAL SERVICES 3PLS OFFER Logistics/transportation consulting Rising operational costs
89 %
55 %
73 %
Poor customer service
4PL/LLP partnerships
Direct to store
36 %
Technology investment
52 %
69 %
62 %
Failed expectations
Lean best practices
29 %
Sustainability/green logistics
Finding, training, retaining qualified labor 57 % Finding, retaining customers 45 % Capacity 42 % Compliance/regulations 40 %
52 %
66 %
Cost
Strategic sourcing strategies 21 % More competitive options 7 % Loss of control 5 % Cultural dissimilarities 2 % Intermodal transportation Managed technology services Demand-driven logistics
Import/export/customs
47 %
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 % Global expansion/sourcing/selling 19 % SPECIAL SERVICES 3PLS OFFER Corporate social responsibility (including sustainability) 37 % Contingency planning/risk management 33 % Meeting customer service requirements 33 % Making a profit 26 % Growth management 23 % Global coverage 6 %
43 %
43 %
37 %
36 % Poor customer service is the factor most likely to torpedo a 3PL partnership. But service doesn’t loom as large in 2024 as it did one year ago. In 2023, 60% of shippers pointed to poor customer service as the top deal breaker, while in 2024, that number has fallen to 36%. As customer service is triggering less tension, broken promises Co-locating, collaborative distribution SHIPPERS, IS PRICE OR SERVICE MORE IMPORTANT? Supply chain decentralization 18 % Price are triggering more. Twenty-nine percent of shippers tell us that failed expectations are the top reason why a 3PL partnership might fall apart, compared with 17% in 2023. And in inflationary times, shippers are watching their dollars more carefully. This year, 21% cite cost as the top reason why these partnerships fail, compared with 11% in 2023. Service 74 % 26 %
STRATEGIES SHIPPERS AND 3PLS USE TO MANAGE CHALLENGES DC network optimization and realignment 57 %
Shippers, Is Price or Service More Important?
Supply chain design
57 %
Logistics/transportation consulting
Nearshoring or reshoring
82 Inbound Logistics • July 2024 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 Direct-to-store transportation is the second-most-common special service oered by 3PLs, but it’s slightly less common than last year. In 2024, 69% of 3PL respondents oer that service, compared with 72% in 2023. This year’s survey also shows a greater focus on sustainability and green logistics. In 2023, that was number 5 on the list of special services. This year it’s number 3, oered by 66% of 3PL respondents. Other services oered by more than half of 3PLs this year are import/ export/customs services (64%) and reverse logistics/product lifecycle management (63%). The service category that has seen the biggest jump is contingency/ crisis planning. In 2023, 31% of 3PLs could help shippers avert supply chain disruptions. Today, 43% oer that service. Direct to store 3PLs continue to oer a broad range of logistics planning and execution services. They find capacity and manage relationships with carriers, route freight for customers, or provide technology that lets shippers plan ecient routes themselves. They might receive and store product, handle order fulfillment, or manage last-mile transportation. 69 % Sustainability/green logistics Many 3PLs also oer more specialized services. Foremost among them is logistics/transportation consulting, in which a 3PLs applies its expertise and technology to questions such as where a shipper should locate distribution centers, which transportation modes it should use, or how to source goods and materials more strategically. The proportion of 3PLs that serve as consultants has grown steadily from 78% of our survey respondents in 2022 to 83% in 2023 to 89% in 2024. 66 % Import/export/customs
89 %
55 %
4PL/LLP partnerships
52 %
Price 26 %
Service 74 %
Lean best practices
52 %
Strategic sourcing strategies
47 %
Intermodal transportation
43 %
43 % While keeping a close eye on costs, shippers still value good service above price. In this year’s survey, 74% of shippers indicate that service is the more important factor of the two. That’s a healthy number, but it’s lower than in 2023, when 81% of shippers chose service over price. 37 % A stronger focus on price makes sense at a time when the cost of all sorts of goods and services forces companies to look for savings wherever they can find them. Still, logistics executives realize that paying a bit more to work with a 3PL that oers excellent service can reduce costs in the long run, as the 3PL helps the shipper manage its supply chain more eciently. That’s why nearly three-quarters of shippers still value service over price when they engage with 3PLs. 36 % Managed technology services Demand-driven logistics Co-locating, collaborative distribution Supply chain decentralization 18 %
Powered by FlippingBook