Chicago — The latest edition of a major study of third-party logistics (3PL) customers identifies several key opportunities for 3PL providers, according to a leading industry trade association executive.
“Findings of the Eighth Annual Third-Party Logistics Study give valuable insight into the direction in which the 3PL market is moving, and providers should take heed,” said Joel Hoiland, president and chief executive officer of IWLA—The Association for Logistics Outsourcing.
Primary among the study’s several findings is the fact that customers have high expectations of their 3PL providers, but a gap exists between what customers receive and what they expect to receive.
“3PL providers must rise to the challenge of meeting the increased expectation of delivering integrated, end-to-end solutions or face a lack of business growth…or worse,” Hoiland said. “Those that meet the challenge will profit greatly, as manufacturers and suppliers become more dependant on companies they can form partnerships with to outsource none-core competencies.”
He added that 3PL providers must continually work to enhance their relationships with customers by focusing on value-added capabilities to differentiate themselves from the competition.
“3PL providers need to focus on key objectives, such as implementing capable information technologies, instituting effective management and relationship processes, integrating services and technologies on a global level and delivering comprehensive solutions that create value for 3PL users and their supply chains,” he said.
While the cost and implementation of these additional services and technologies can be overwhelming, small and mid-size warehouse and logistics outsourcing entities should take heart, Hoiland noted. “Warehousing remained the logistics activity most often outsourced among North American study respondents (73 percent), followed by outbound transportation (71 percent). Therefore, it is clear that there remain a substantial number of customers that need the basic services at the local and regional levels. The IWLA has identified these needs in its own surveys and has developed its educational programs around beefing up members’ competencies in these areas.” (For a listing of IWLA seminars and conferences, go to the association’s Website www.iwla.com.)
The Eighth Annual Third-Party Logistics Study was authored by C. John Langley Jr., Ph.D., logistics institute professor of supply chain management and director of supply chain executive programs at the Georgia Institute of Technology, in conjunction with Gap Gemini Ernst & Young U.S. LLC and FedEx Supply Chain Services.