The recently released 2014 Third-Party Logistics Study shows that 3PL continues to increase in popularity as an alternative to insourced logistics for many shippers.
Produced by Capgemini with the participation of industry and educational companies and institutions, including Penske Logistics, Penn State University and the International Warehouse Logistics Association, the 2014 report is the 18th annual version. The report is a widely accepted barometer of the state of logistics outsourcing.
The executive summary of the report opens with a statement outlining the ongoing positive nature of the relationship between shippers and their third party logistics suppliers.
And then the report delivers the all the good numbers:
- 13% increase in the share of total logistics budgets devoted to 3PL (2013 vs 2014)
- 72% of shippers are increasing the amount of outsourced services they use
- 78% of 3PL companies report an increase in outsourcing from their clients
- 23% of shippers say they are returning to insourcing
- 36% of 3PLs say they see some clients returning to insourcing
Reduction and Consolidation of 3PL Suppliers
The report confirms many recent trends in logistics outsourcing. One that 3PLs should keep a tab on is the ongoing consolidation and reduction by shippers of the number of 3PLs they use. 56% of shippers reported some form of reduction and/or consolidation, which is consistent with reports from recent years.
The 3PL Payoff
The main reason for all the good news is that outsourced logistics continue to turn in good bottom-line numbers. Shippers reported the following average benefits from their use of 3PLs:
- Logistics cost reduction of 11%
- Inventory cost reduction of 6%
- Logistics fixed asset reduction of 23%
- Order fill rate increase: 4%
- Order accuracy increase: 1.5%
The Real Good News: The 3PL industry continues to grow and prove the real benefits it offers its customers.