Companies have been using third parties to take care of many of the logistics of doing business, particularly in transportation, for hundreds of years. But 3PL (third-party logistics) as a formal discipline has only been around for a few decades.
But you wouldn’t know it by looking at the numbers. For an industry that didn’t really exist until the 1980s, today, according to “Trends in 3PL/Customer Relationships – 2013 by Armstrong & Associates, 86% of US Fortune 500 companies use a 3PL supplier. And the largest companies use them most, with GM, Walmart and Proctor & Gamble each contracting over 50 3PL companies.
Just in case you’re one of the dwindling number of companies that do not use a 3PL services, or under-utilize them, the same report outlines some very impressive statistics that show why 3PL has enjoyed such incredible growth:
- Satisfaction – 84% of respondents view their relationships with 3PL providers as ‘successful’
- Cost Reductions – Survey respondents report average cost reductions of 15% in logistics services and 8% in inventory costs in 2012
- Order Fill Rates – 12% increase in 2012
- Order Accuracy – 7% increase in 2012
- Growth – 65% of respondents said they are increasing their use of 3PL services versus only 22% who are decreasing
- The Reasons for Not Outsourcing 3rd Party Logistics are Declining (between 2006 and 2013), including:
- 50% fewer say that cost reductions would not be experienced by using 3PLs
- 60% fewer think they have better in-house resources than 3PLs
- 76% fewer believe their control over outsourced functions would diminish
Clearly there are more reasons than ever to consider 3PL providers or to expand the 3PL services you use.