Nearly threefourths of shippers 71 said realtime analytics from 3PLs help them better understand shipping alternatives and 61 valued 3PLsrsquo assessments of trade lanes and origindestination pairs in terms of cost and service levels

Nearly three-fourths of shippers (71%) said real-time analytics from 3PLs help them better understand shipping alternatives, and 61% valued 3PLs’ assessments of trade lanes and origin-destination pairs in terms of cost and service levels.

Data-Driven Analytics Are Key to Supply Chain Success

Many 3PLs have evolved from tactical service providers to collaborative partners that take on greater accountability and control, according to the 2017 Annual Third-Party Logistic Study. Providers have also increased their technology expectations, and 3PLs are responding with increased capabilities. The study was presented at the recent Council of Supply Chain Management Professionals (CSCMP) annual conference in Orlando.

The 2017 global report, created by Capgemini Consulting, Penn State University and Penkse Logistics, with support from MH&L’s sister publication IndustryWeek, shows that shippers and their 3PLs continue to move toward meaningful partnerships and steady improvement in the strategic nature of relationships. Both parties—91% of 3PL users and 97% of 3PL providers—reported that their relationships are successful and that their work is yielding positive results. This is an increase from 2012, when 88% of 3PL users and 94% of 3PL providers reported that their relationships were successful.

The 2017 study showed that 75% of shippers and 93% of 3PL providers said the use of 3PL services has contributed to overall logistics cost reductions, and 86% of shippers and 98% of 3PL providers said the use of 3PLs has contributed to improved customer service. Moreover, the majority of both groups—73% of shippers and 90% of 3PL providers—said 3PLs offer new and innovative ways to improve logistics effectiveness.

This year’s results show that as 3PL offerings mature, shippers are increasingly taking advantage of logistics providers’ expertise. As seen in previous studies, the most frequently outsourced activities continue to be those that are more transactional, operational and repetitive. Activities that are strategic, IT-intensive and customer-facing tend to be outsourced to a lesser extent.

However, this year even outsourcing in those categories is increasing over historical values. For example, in the 2017 study, 19% of shippers are taking advantage of supply chain consultancy services, compared to 11% last year and 17% of shippers in the 2017 study are utilizing IT services, compared to 11% last year.

Fluctuating capacity, increased shipper demands and disruptions within the industry are creating a volatile decision-making environment for shippers and logistics providers trying to optimize the supply chain. Both parties are increasingly using information and analytics to drive their decisions. Nearly three-fourths of shippers (71%) said real-time analytics from 3PLs help them better understand shipping alternatives, and 61% valued 3PLs’ assessments of trade lanes and origin-destination pairs in terms of cost and service levels.

In this year’s survey, nearly all 3PLs (98%) said improved, data-driven decision-making is essential to the future success of supply chain activities and processes, and 93% of shippers agreed. Both groups—86% of 3PLs and 81 percent of shippers—said the effective use of big data will become a core competency of their supply chain organizations.

“Data-driven decision-making is certainly an increasing trend in the supply chain,” notes Tom McKenna, SVP of engineering and technology with Penske Logistics. “Among the biggest challenges that come with increased visibility and more data is determining how to best use that information to drive improvements that benefit the customer.”

While much of the industry talk centers on Big Data, McKenna believes “we need to start talking about Big Analytics. If you have children going into college, tell them to go into data science because we’re going to need a lot of them.”

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