Shippers and third-party logistics (3PL) providers clearly have learned how to play well together. The just-released 2019 23rd Annual Third-Party Logistics Study shows that the majority of shippers—91%—report that the relationships they have with their 3PLs generally have been successful. A higher number—98%—of 3PLs agree that their customer relationships generally have been successful.
Among respondents to the 2019 study, 89% of shippers and 98% of 3PL providers agree that the use of 3PLs has contributed to improving services to the ultimate customers. In addition, 73% of 3PL users and 91% of 3PL providers agree that 3PLs provide new and innovative ways to improve logistics effectiveness.
However, one area where both 3PLs and their customers see plenty of room for improvement is in the arena of so-called “last-yard” capabilities. “Last-yard” refers to what happens to a shipment once it is delivered to a customer or consumer, and how it is routed to the specific location where it may be needed or used.
“Last-yard logistics can be chaotic,” according to the 2019 report. “The pain points are driven by the increased package volumes, and how these volumes impact the time and space constraints at the final destinations.”
Seventy-one percent of shippers and 72% of 3PLs third-party firms recognize last-yard delivery’s influence on key retailer metrics, such as consumer satisfaction and brand loyalty. However, only about a third of all survey takers agreed that companies do enough to effectively manage last-yard issues.
A related area of consumer expectations is omni-channel retail, whereby consumers buy products online for home delivery or in-store pickup, and also still visit physical stores to make a purchase or return. “Retailers continue to emphasize an always-on, always-open shopping experience that provides seamless interaction across all retail sales channels, which is forcing shippers and their logistics partners to be fluid and move quickly,” according to the study.
In the survey, 38% of shippers said they’re inconsistent across the omni-channel, and 36% noted they have no capability in this area. Supply chains are investing in integrated technologies to reverse this trend, which include: enterprise resource planning software (72%); warehouse management systems (56%); transportation management networks (38%); and supply chain visibility tools (34%).
Then there’s the matter of what happens when disruptors beyond anyone’s control are thrown into the mix. Among other consequences, natural disasters, extreme weather or pandemics mean that supermarket shelves are missing key household items and products are out-of-stock online.
The most common impacts, according to shipper respondents, are increased transportation and logistics costs (75%), transportation and logistics network disruptions (73%), and higher supplier costs (66%).
Both shippers and 3PLs are putting more emphasis on mitigating these disruptions than they did five years ago, with 23% of shippers and 22% of 3PLs surveyed giving it “significantly greater” priority. The study notes that two major tools that shippers and third-party logistics organizations can utilize to minimize disruptions are visibility tools (61% of shippers and 67% of 3PLs), and partnerships (72% and 64%, respectively).
When it comes to supply-chain management generally, “the focus is on maximizing utilization and resources as they are becoming more limited, and moving products to the end user in the most economical way,” said Joe Carlier, senior vice president of global sales for Penske Logistics, one of the study’s sponsors, along with Infosys Consulting, Penn State University and Korn Ferry.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).
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