TOP CHALLENGES SHIPPERS FACE TOP CHALLENGES 3PLs FACE Technology investment 66 %
Cutting transport costs 37 % Business process improvement 25 % Selling in new markets 19 % Improving customer service 18 % Finding, training, retaining qualified labor 16 % Managing inventory 15 % Ecommerce 14 %
Rising operational costs/access to capital 62 % Finding, training, retaining qualified labor 59 % Capacity 46 % Corporate social responsibility (including sustainability) 38 % Finding, retaining customers 33 % Compliance/regulations 32 % Growth management 30 % Meeting customer service requirements 29 % Supply chain disruption/contingency planning 27 %
Supply chain visibility 13 % Reducing labor costs 12 % Corporate social responsibility (including sustainability) 11 % Sourcing in new markets 11 % Managing big data 10 % DC network optimization 9 %
Making a profit 16 % Global coverage 9 %
The capacity crunch isn’t fully gone, but it’s considerably less dire today than one year ago. In 2022, 80% of 3PL respondents said finding space for their customers’ cargo was a top concern. In 2023, only 46% worry about whether they can book the capacity they need. Instead, this year the top challenge for 3PLs is technology investment, a sign that service providers want to streamline their operations and gain competitive advantage through better use of data. The second-biggest challenge concerns rising operational costs and access to capital. Apparently, 3PLs are more likely to struggle with the cost of doing business than their customers are. More 3PLs than shippers worry about finding, retaining, and training qualified labor, but not as many as last year. In 2022, 70% of 3PLs faced human resources challenges. In 2023, the number drops to 59%. Along with technology investment, a few other challenges are drawing more concern in 2023 than in 2022. They include corporate social responsibility (38% in 2023 vs. 24% in 2022), finding and retaining customers (33% in 2023 vs. 23% in 2022), and making a profit (16% in 2023 vs. 10% in 2022). Our retail sector has faced quite a challenging year. With bleak outlooks for some retail customers, we are looking to grow our other verticals... such as medical supplies and auto parts.
Technology strategy and implementation 8 % Risk management/contingency planning 7 % Vendor management 6 % Compliance issues (regulations, security) 5 % Reducing assets and/or infrastructure 5 %
As they have in the past few years, transportation costs top the list of challenges that shippers face in their operations. But as freight rates have fallen over the past year, shippers are less anxious about reducing transportation expenses. This year, just 37% of shipper respondents cite transportation cost cutting as a significant challenge. That’s a steep drop from 2022, when 70% were concerned about this issue. Shippers also have an easier time these days with human resources. In 2022, 55% of shippers in the survey faced challenges finding, training, and retaining qualified labor. This year, that number is just 16%. In fact, shippers seem far less worried in general than they were in 2022. For every potential challenge we mentioned in our survey, fewer shippers than last year call it a significant concern. For example, while 51% of respondents in 2022 cited business process improvements as a challenge, half as many do in 2023. Ecommerce posed a challenge to 45% of shippers in 2022 but only 14% in 2023. Thirty-eight percent of shippers in 2022 faced challenges with improving customer service, but in 2023 the number is 18%.
July 2023 • Inbound Logistics 71
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