New survey indicates improvements by 3PLs ‘imperative’
A new survey has been released on trends and needs in the global logistics industry. The survey, consisting of more than 650 logistics and supply chain executives in North America, Europe, Asia Pacific and Latin America, was undertaken by consulting company Cap Gemini in conjunction with the Georgia Institute of Technology and FedEx.
The survey found that over three-quarters of respondents currently use 3PL services and more than eight in ten were satisfied with their relationships with their logistics supplier. However, it also identified that customer demands for 3PL performance and sophistication were increasing, making improvements and investment in those areas imperative.
The findings also confirmed the belief that 3PL providers sometimes struggle to keep up with customer demands for new capabilities. All the regions surveyed saw the need for 3PL providers to enhance their process of continual improvements and achievements in their service offerings.
Overall, respondents felt that 3PL providers were particularly strong in terms of facilitating supply chain improvement, providing needed IT (although further improvement is desired), and providing means for regional expansion. However, the areas in which improvement was most needed were in providing global supply chain solutions, supply chain integration solutions and advanced supply chain services.
A focus group pointed out some other concerns. The issues that received the most attention included high level disappointment with the 3PL provider’s ability to develop and offer value added services, the need for relationship re-invention and continual improvement, the increasing value of information, the emerging role of supply chain integration, and the need for 3PL providers to expand their global capabilities and reach.
The study also indicated that over the past several years the top service offerings most commonly used by customers has not changed (outbound transportation, warehousing, inbound transportation, customs clearance, and customs brokerage). While these services are considered “core” or expected, respondents indicated that they selected a 3PL provider based more on the value added services they provided. In all regions, the four most important reasons why non-users did not use 3PL services were: ‘logistics is a core competency’; ‘logistics is too important to outsource’; ‘costs would not be reduced’; and ‘control would diminish’.
The overwhelming IT-based 3PL service required by clients in the future by all regions is RFID (North America 53%, Western Europe 61%, Asia Pacific 59% and Latin America 48%). With many RFID supplier mandates scheduled to be launched in 2005 including Wal-Mart and the US Department of Defense, users clearly see a big challenge and opportunity for 3PL providers to assist them with the implementation of this capability.
