Four Major Issues for Third Party Logistics Suppliers

The survey was conducted of its 3PL customers by Provia Software, a leading provider of supply chain execution solutions. First, more than 60% of respondents felt they are experiencing decreased profit margins. Second, the same percentage of respondents claim they have less lead time to set up new customers.

Third, upfront efforts and costs to implement solutions are preventing 50% of those responding to the survey from achieving better results. A fourth challenge, according to the 3PLs is the increased emphasis on regulations and requirements.

Note is made that Wal-Mart is putting cost pressures on customers whether directly or indirectly. In addition to RFID requirements, there are FDA and other governmental mandates that must be met by 3PLs for their customers.

Since automation can play a significant role in easing some of these problems, its anticipated that technology solutions are going to play a larger role in 3PL business. The survey indicated that logistics services providers will be looking for solutions to help increase visibility for their customers and to ease communication between those customers, suppliers and 3PLs. Automation of warehousing operations and assistance in labor management were other solutions 3PLs anticipate incorporating in their services over the next five years, according to the survey.

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