For the past 12 years, Inbound Logistics Magazine has conducted an annual market research report that takes a deep dive into outsourcing strategy for shippers and providers alike. Thousands of shippers and 3PLs are surveyed to identify trends shaping the decision-making process behind outsourcing logistics.
Let’s take a look at the key takeaways from the report.
Supply Chain Outsourcing Becoming Strategic Imperative
The survey reports that there is a “sea-change shift slowly sweeping across the business world. Supply chain and logistics functions are not only gaining traction in C-suite conversations, increasingly they command them.” Supply chain officers are gaining well-deserved gravitas. At companies like Apple, GM and Revlon, “chief supply chain officers are climbing to the top, dragging with them newfound esteem from their corporate peers.” With that, logistics and supply chain outsourcing has become mainstream—even considered a “strategic imperative” in today’s global marketplace.
Service and Cost Are Top Levers for Shippers
Service quality is at the forefront of factors affecting shipper outsourcing decision-making. When asked which is more important, 75 percent of shippers favor service over price. In fact, “Forty-three percent of surveyed shippers cite failed expectations as the primary reason for failed 3PL partnerships, closely followed by poor customer service (42 percent).”
While many shippers demand top service from their logistics partners, transportation costs are also important. “Cutting transport costs” is the top challenge of 59 percent of the shipper survey respondents, followed by “Business process improvement (38 percent), Better customer service (32 percent), and Supply chain visibility (29 percent).
Technology Investments Remain a Priority
Investments in supply chain and logistics technology continue to be a priority for both shippers and third-party logistics providers. “The ‘Amazon effect’ has only amplified the importance of speed and agility in today’s marketplace. Aggregating visibility across the supply chain and continuously re-engineering business process using technology often require external support,” says Inbound Logistics.
With business process improvement and supply chain visibility being top challenges for shippers, 3PLs are responding with technology solutions that aggregate data analytics across supply chains and provide logistics optimization to help increase efficiency.
GlobalTranz, for example, is investing significantly in the company’s GTZ technology platform, which optimizes freight movement and matches shipper demand and carrier capacity in near real-time. The GTZ platform delivers analytics and freight management capabilities, ultimately giving shippers deeper visibility and insights into their logistics operations.
Read Inbound Logistics’ complete survey results 3PL Perspectives 2017.
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