We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Businesses still struggle to improve 3PL relationships despite increasing demand for outsourced services, study finds
Forward Thinking

Businesses still struggle to improve 3PL relationships despite increasing demand for outsourced services, study finds

February 24, 2016
Ben Ames
No Comments

Despite strong growth over the decades in the adoption of third-party logistics (3PL) services, U.S. businesses still struggle to maximize the benefits of the outsourced relationship, a University of Tennessee study reveals.

Drawn from interviews with more than 60 executives, the study identified three common mistakes that companies admit they make when starting a relationship with a 3PL: First is their failure to conduct a thorough needs assessment before hiring a 3PL. Second is providing inaccurate information about themselves when they send out bids to find 3PL partners. The third error is omitting their top leaders from the 3PL selection process, leading to the lack of a businesswide strategy to support the new partnership.

The inefficient relationship between businesses and their 3PL partners comes despite strong growth in the sector. More than 80 percent of domestic Fortune 500 companies use 3PLs to outsource their logistics operations all or part of the time, according to a 2015 CapGemini study cited in the report.

"Today's 3PL is not your grandfather's 3PL," says Paul Dittmann, executive director of the Global Supply Chain Institute at UT's Haslam College of Business. Dittmann and co-author Kate Vitasek wrote the study, which was sponsored by Kenco, a Chattanooga, Tenn.-based 3PL.

"The scope of third-party logistics has widely increased, and expectations of them have accelerated, but that does not mean firms are using 3PLs to their full advantage," Dittmann said.

Possible solutions for these hurdles include improved clarity of expectations and a balance between accountability and independence, the study concluded. The best 3PL partnerships focus on outcomes instead of processes, and implement contracts that include incentives for the 3PL to meet its goals, according to the report

The report from the university's Global Supply Chain Institute is titled "Selecting and Managing a Third Party Logistics Provider."

Logistics
    • Related Articles

      CMA CGM lays out $3.0 billion to acquire e-commerce 3PL

      Uber Freight buys 3PL Transplace from its private equity owner for $2.25 billion

      Parcel and 3PL employers seek labor for winter peak push

    Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly?s sister publication, DC Velocity.

    Recent Articles by Ben Ames

    IKEA stores’ parent company acquires Made4net

    Port operators are optimistic as April stats show recovery from pandemic sugar-crash

    Union Pacific agrees to provide more predictable schedules for union rail workers

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Report: Sagging freight stats show that trucking sector is returning to its historic mean

    • Survey: parcel delivery drivers are frustrated by using their own smartphones for work

    • Heavy transport across two continents

    • Survey: most Americans unaware that truckers face shortage of parking spaces

    • Supply chain executives not yet seeing expected results from technology investments

    Featured Video

    20221107korber large vs

    Enhancing Customer Experience with Your Supply Chain Strategy

    Viewer Contributed
    With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

    FEATURED WHITE PAPERS

    • Three layers of forklift safety: Promoting operating best practices

    • The Complete Guide to Automated Packaging

    • Five tips for parcel success in 2023

    • Guide to Pallet Rack Safety

    View More

    Subscribe to Supply Chain Quarterly

    Get Your Subscription
    • SUBSCRIBE
    • E-NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing