2010 Third-Party Logistics: Results and Findings of the 15th Annual Study

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Discovering and exploring 3PL trends, issues and opportunities is the overall objective of the 2010 Third-Party Logistics Study. A web-based survey, desk research, focus interviews and workshops provide a well-rounded, diverse sampling of attitudes, ideas and results experienced by 3PL users, non-users and 3PL providers. Each year the study results also suggest trends that warrant closer examination. Included in the 2010 study are special topic reports on total landed cost, life sciences and fast-moving consumer goods. The study also provides some perspectives on what shippers and 3PLs are doing to improve and enhance their businesses and their business relationships.

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  • Need to highlight both User and Provider survey
    Mention focus on State-of-the-Market, and also on special topics that change on a yearly basis.
    Study concludes with Strategic Assessment of 3PL-customer relationships
  • Highlight geographic spread of respondents (shippers and 3PL providers), and principal industries from which 3PL shippers are involved.
  • Total landed cost is the sum of all costs associated with making and delivering products to the point where they produce revenue -- usually your customer's door. Total delivery cost, landed cost, cradle to grave. Includes both obvious and hidden costs.
  • First, need to mention this is only the second year that we have surveyed 3PL providers. Principal reason for doing this is to get perspectives from 3PL providers on the very same topics and issues that include in the shipper version of the survey.
    This is the array of services offered by 3PLs that were included in the survey. To some extent these percentages parallel those from the shipper results, but there are notable exceptions in that many 3PL providers typically offer some services that are only used by small percentages of shippers (e.g., customer service; supply chain consultancy services; IT services; etc.). Some of this may be because there are differences between what shippers and 3PL think of each type of service. Maybe a good example is “customer service” which may differ in perspective between shippers and 3PLs.
  • First, need to mention this is only the second year that we have surveyed 3PL providers. Principal reason for doing this is to get perspectives from 3PL providers on the very same topics and issues that include in the shipper version of the survey.
    This is the array of services offered by 3PLs that were included in the survey. To some extent these percentages parallel those from the shipper results, but there are notable exceptions in that many 3PL providers typically offer some services that are only used by small percentages of shippers (e.g., customer service; supply chain consultancy services; IT services; etc.). Some of this may be because there are differences between what shippers and 3PL think of each type of service. Maybe a good example is “customer service” which may differ in perspective between shippers and 3PLs.
  • Total landed cost is the sum of all costs associated with making and delivering products to the point where they produce revenue -- usually your customer's door. Total delivery cost, landed cost, cradle to grave. Includes both obvious and hidden costs.
  • Top three are improving shipment density/load utilization, reducing logistics costs (#2 in this list) and having a supply chain disruption/mitigation strategy in place, followed by sustainability
  • 2010 Third-Party Logistics: Results and Findings of the 15th Annual Study

    1. 1. September 28, 2010
    2. 2. The 2010 15th annual 3PL study focuses attention on topics of current importance 3PL Customer study and Provider study  Investigate customer needs and experiences  Validate customer perspectives from 3PL providers point of view  Identify areas for future improvement Topics of contemporary interest  Total landed cost (TLC)  Life sciences  Fast-moving consumer goods Strategic assessment of future of 3PL-customer relationships 2010 Special Topics
    3. 3. Survey respondents represented a range of geographies and industries Industry % 1. High-Tech / Electronics 2. Consumer Products 3. Food and Beverage 4. Automotive and Transport Equipment 5. Life Sciences and Pharma/Healthcare 6. Industrial Manufacturing 7. Retail 8. Chemical Additional Industries (14) Other 12 10 9 9 8 8 6 6 18 14
    4. 4. Changing use of 3PL Services by Shippers in 2010 65% of Shippers Report Increase in Use of Outsourced Logistics Services 24% of Shippers Report Returning to Insourcing Some of Their Logistics Activities 46% of Shippers Are Consolidating Number of 3PLs They Use
    5. 5. 3PLs provide a wide range of outsourced logistics services Outsourced Logistics Service 2010 3PL Provider Percentages All Regions Domestic Transportation 86% Warehousing 85 Transportation Planning and Management 76 Customer Service 71 Cross-Docking 70 International Transportation 67 Product Labeling, Packaging, Assembly, Kitting 67 5
    6. 6. 3PLs provide a wide range of outsourced logistics services Outsourced Logistics Service 2010 3PL Provider Percentages All Regions Supply Chain Consultancy Services Provided by 3PLs 65% Order Entry, Processing and Fulfillment 65 Reverse Logistics (defective, repair, return) 62 Information Technology (IT) Services 58 Forwarding 56 Customs Brokerage 54 LLP/4PL Services 45 6
    7. 7. 7
    8. 8. Having the means to quickly and accurately compute total landed cost enables shippers to realize important benefits Decision Making Cost Insights Price & Margin Communication
    9. 9. Today’s use of sophisticated computer models to forecast the performance of supply chains is a requisite for continued improvement in a competitive market place Today’s use of sophisticated computer models to forecast the performance of supply chains is a requisite for continued improvement in a competitive market place
    10. 10. 10
    11. 11. Shipment visibility and inventory control ranked high, for both users and 3PLs, as important services to provide % respondents by what they deem as important services and capabilities that 3PLs provide NOTE: Shown above are excerpts of the top 6 services that users want and 3PLs provide. The full list of services will be found in the final 3PL report. 11 Users
    12. 12. Shipment visibility and inventory control ranked high, for both users and 3PLs, as important services to provide % respondents by services that they actively provide to customers 12 3PLs NOTE: Shown above are excerpts of the top 6 services that users want and 3PLs provide. The full list of services will be found in the final 3PL report.
    13. 13. 13
    14. 14. Improving shipment density/load utilization Reducing logistics costs Having a supply chain disruption/mitigation strategy in place Building sustainability into the supply chain Ensuring Perfect Order Fulfillment Shortening new product time-to-market and supply chain integration Accommodating sales promotions Rapidly sensing and responding to changes in consumer demand Gathering and utilizing in-store data on products Growing market share in emerging economies 74% 69% 68% 65% 62% 46% 42% 35% 32% 29% Shippers consider 3PL usefulness depending on the issue % user respondents by type of issue 3PL is seen as helping to manage 14
    15. 15. Do 3PLs provide shippers with new and innovative ways to improve logistics effectiveness? Both 3PLs and shippers may bear some responsibility for an “innovation gap” Shippers 68% believe 3PLs provide value added innovation Some shippers remain satisfied with core service delivery But clearly, many shipper expect more innovation 3PLs 95% believe 3PLs provide value added innovation Should have capability to deliver based on industry and cross-industry experience 58% indicate that shippers are hesitant to share requisite data 15
    16. 16. Thank You!  Check out our website at www.3plstudy.com  Download the 2010 and earlier reports  Find additional information about the 2010 3PL Study 16

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