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Top 10 3PL Excellence Awards 126 3Pls Put on the White Gloves 2018 88 Market Research: 3PL Perspectives 97 Top 100 3PL Providers 115 Readers’ Choice: Top 10 3PL Excellence Awards 126 3PLs Put on the White Gloves July 2018 • Inbound Logistics 87 Inbound Logistics’ 13th annual 3PL market research report examines challenges, trends, and future expectations that are driving shippers and logistics providers to reinvent the way they manage logistics and supply chain operations. By Jason McDowell he current supply chain Shippers are better off investing environment is tumultuous FIGURE 1: How many 3PLs do resources in logistics partnerships. T at best, both domestically and shippers use? Supply chain disruptions may stem globally. Logistics and supply chain Just one 12% from skilled labor shortages, tight professionals may be facing more 60= capacity, fluctuating international trade compounded difficulties in 2018 than More than one 100= 20% relationships, outdated technology, or they’ve ever faced before. Fortunately, It depends 340= 68% some combination of one or more of however, third-party logistics (3PL) these issues. However, it’s when the sup- providers have stepped up to combat ply chain gets turned on its head that these challenges and help shippers to remember that economic booms like logistics providers shine. mitigate the increased risks plaguing the one we’re experiencing now are At times like these, shippers must the supply chain. cyclical. When economic growth even- let their 3PLs do what they do best— On the up side, the U.S. economy tually slows, and capacity opens up leverage relationships and experience is on firm footing and showing signs of again, shippers that make reactionary to address any number of supply chain continuing expansion. The Made in investments now will be left with costly challenges. 3PLs spend their existence America movement has manufacturers unused assets. establishing and honing best practices, reshoring operations at higher rates than any time in recent history. While gen- erally a positive, this economic success FIGURE 2: Services purchased by shippers also leaves shippers facing tight capac- Trucking (TL/LTL) 83% ity across most major lanes. 415= The capacity crisis that was nar- 3PL, Contract Logistics 360= 72% rowly avoided in 2017 has now hit the Small Package Delivery, Expedited/Express 66% U.S. supply chain full force. An ever- 330= expanding driver shortage across the Warehousing & DC Services 330= 66% trucking sector, combined with recent Supply Chain Technology, Software/Systems 280= 56% electronic logging device (ELD) man- dates and continuing Hours-of-Service Rail, Rail Intermodal 265= 53% (HoS) regulations, leaves the logistics Air Freight 245= 49% sector scrambling to find ways to move freight on time as drivers find them- International Shipping, Freight Forwarding 245= 49% selves restricted to fewer hours on the Ocean, Ocean Intermodal 220= 44% road. A lack of readily available trucking Materials Handling Systems, Equipment, Forklifts 35% space has caused an intermodal spill- 175= over into the rail sector, as well. Site, Port. Facility Selection 150= 30% Some shippers are investing in pri- Fleet Operations, Dedicated Contract Carriage 25% vate fleets and other assets to offset 125= capacity issues, but this move poses Transportation Equipment 100= 20% significant risks for the future. It’s Packaging/Labeling Systems 45= 9% important for supply chain professionals 88 Inbound Logistics • July 2018 and they can apply that expertise across ■■“They always pick up and deliver on partners, or some combination of the their client base to drive efficiency for time, and provide excellent customer two. They can create capacity through all partners. service. The equipment is always secondary process improvements such Inbound Logistics’ 13th annual 3PL clean, they offer excellent communi- as packaging optimization, business Perspectives report examines these cation with the shipper and receiver, process improvement, new technol- issues and more, exploring how shippers and resolve all issues fast.” ogy, and backhaul programs. 3PLs use 3PLs to combat disruption, access Recognizing this demand for an have demonstrated that they are up to innovative technologies at a lower cost, array of value-added services, 3PLs have the task of providing this range of effi- and find capacity where none seems to responded by offering a wide selection ciencies for their clients. exist. Logistics outsourcing is no longer of service options. Demand-driven/ With a majority of 3PLs offering a trend, but a standard as the difficul- inbound logistics tops the list of popular everything from truckload services ties of supply chain management grow logistics services reported by 3PL survey (97 percent) to crossdocking (82 per- more complex and diverse. Many ship- respondents, with 91 percent delivering cent) to logistics and transportation pers even turn to multiple 3PL partners this service (see Figure 3). consulting services (92 percent), logis- (see Figure 1) to address the widely var- Of note this year, 72 percent of 3PLs tics partners are fast becoming a true ied demands they are faced with in now offer logistics process reengineer- one-stop shop for the shippers they today’s hectic environment. Diverse Range of Services FIGURE 3: Logistics services offered by 3PLs IL’s 2018 Top 10 3PL survey data shows that shippers are buying a diverse Inbound Logistics 450= 91% range of services from their 3PLs. Logistics Process Reengineering 360= 72% Unsurprisingly, given the current capac- ity shortage, 83 percent of surveyed JIT 359= 71% shippers use 3PLs to source truckload Inventory Management 330= 66% and less-than-truckload (LTL) services, taking the top spot this year (see Figure 2). Lead Logistics Provider/4th-Party Logistics 320= 64% However, if that’s the only service ship- Vendor Management 61% pers use their 3PL for, they are leaving 300= value on the table. Shared Services (co-locating, collaborative distribution) 275= 55% As shippers rely on expert partners to handle a range of logistics prob- Supply Chain Finance (Payment Audit/Processing/Claims) 235= 47% lems, they begin realizing the benefits Integrated Logistics 41% of focusing on their own core com- 205= petencies. Beyond securing capacity, Global Trade Services 180= 36% shippers use 3PLs to offset complicated, demanding, or resource-heavy logistics processes with contract logistics services ing (see Figure 3), as shifting supply serve (see Figure 4). When asked what (72 percent), expedited/express services chain demands require innovative new they like most about their 3PL, plenty (66 percent), and warehousing and dis- methods to address them. The offering of shipper respondents offered com- tribution (66 percent). (See Figure 2). of fourth-party logistics (4PL) services ments about the diversity of their 3PL’s Many respondents to our shipper sur- (64 percent)–where a logistics provider service package: vey express their appreciation for a wide takes the lead role in managing all sup- ■■“They handle everything.” range of 3PL services: ply chain partners to reduce the shipper’s ■■“They complete everything that we ■■“Service alone would be enough, but burden of such coordination–is another need and in the time we need it. this business is all encompassing. My up-ticking trend that this report has There’s no need to go anywhere else.” 3PL is the only one I use that can tracked over the past several years. ■■“They have a very diverse portfolio take care of all my logistical needs. While strict silos once existed of offerings.” We have a rapidly growing business between different aspects of the supply ■■“They offer a wide range of functions.” and my expectations are high.” chain, these have largely been broken ■■“This company covers all of the sup- ■■“My 3PL can always handle anything down in the service provider market. ply chain.” we throw at them and I don’t have to Beyond the usual higher-level logistics ■■“They understand our core organiza- worry about them not getting done process management services, many tional make-up, and therefore can set on time.” 3PLs now offer direct transportation up processes, standard operating pro- ■■“They do an awesome job for us in or warehousing/distribution services, cesures, and carriers that best fit our every way.” either via their own assets, through quick-serve model.” July 2018 • Inbound Logistics 89 Supply chain technology has begun ■■“Great technology solutions.” FIGURE 4: Additional services advancing so rapidly that many shippers ■■“Our 3PL invests in innovation 3PLs offer hesitate to invest in the latest solutions and technology.” ■■ WAREHOUSING SERVICES for fear that they will be outdated within “The 3PL has embraced tech- E-commerce 51% the next few years. 3PLs have begun to nology and made it a very easy Pick/Pack, Subassembly 64% take advantage of this rapid technol- platform for getting quotes and mak- ogy development by offering advanced ing shipments.” Crossdocking 82% hosted, cloud-based, and/or Software- ■■“Quality service, technology, DC Management 56% as-a-Service supply chain solutions to and innovation.” Site Selection 49% their clients. Shippers of all sizes can As manufacturers embrace Industry Transload 66% now take advantage of advanced supply 4.0, the logistics sector must keep pace. Vendor Managed Inventory 63% chain analytics, transportation manage- If Supply Chain 4.0 can’t move com- Fulfillment 65% ment systems, warehouse management ponents and raw materials at the speed systems, logistics optimization, big that Industry 4.0 innovations require,
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