In case you haven’t had a chance to read the 2018 Third-Party Logistics Study, here are some key takeaways from the results and findings of the 22nd annual report by Dr. C. John Langley and Infosys:
- Global Results Have Been Mixed. Overall 3PL revenues, estimated at $802B in 2016, have declined slightly over the past several years despite increases in the Asia-Pacific and North America.
- Logistics Costs Are Increasing. Logistics expenditures as a percentage of sales revenues increased to 11% in the current year, up from 10% the previous year, as a higher percentage of shippers’ transportation spend is being outsourced with 3PLs (reportedly 55% in most current year).
- Shippers Are Outsourcing More. 61% of shippers in the study noted that they intend to increase their usage of outsourced logistics services. Domestic transportation and warehousing remain the two most outsourced logistics services; however, outsourcing of information technology (IT) services had the greatest year-over-year increase for the second consecutive year (see graph).
- The IT Satisfaction Gap Is Widening. Despite more outsourcing of IT activities, fewer shippers are satisfied with these services; an indication that, perhaps, shippers’ expectations have increased as technology has improved or because shippers are seeking enhanced analytical capabilities to help drive more effective supply chain decisions.
- 3PL Capabilities Are Expanding. As more conversations around supply chain efficiency have entered the board room, 3PL providers are refining and expanding their core competencies, which in turn is allowing shippers to focus more on their core competencies.
If you haven’t already, you should download and read the entire 2018 Third-Party Logistics Study. The authors also share some perspectives on the impact blockchains could have on logistics; automation and digitization in the supply chain; and the logistics talent revolution.
If you’re a shipper looking to outsource some or all of your transportation, logistics or supply chain activities, let us know. We stand ready to help businesses address their most critical logistics challenges.