Warehousing Drops Down List of Reasons to Outsource

North America is the largest global market for third party logistics services (3PL), accounting for over $1 billion in spending, according to a report published by eyefortransport. Its hefty growth rate of 20% is double the rate in Europe.

Over the last four years, the reason for outsourcing, as reflected in the services used by manufacturers, has shifted from warehouse management to freight payment.

Warehouse management led responses in 2000 at 56%. Though 60% of companies now say they use 3PLs for warehouse management, 72% use 3PLs for freight payment. This makes freight payment the leading outsourced logistics service, up from 43% in 2000. Shipment consolidation, also used by 43% of respondents in 2000, has increased among respondents and is now used by 66% of respondents.

Among the services shippers plan to use in 2004, transportation/distribution leads the list with 71% of respondents saying they plan to use a 3PL. Of the respondents, 59% say they plan to use a 3PL for warehousing in 2004.

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