Relationships between third-party logistics providers (3PLs) and shippers strengthened this past year, with 95% of shippers and 99% of 3PLs indicating that they are satisfied with their partnership, according to “The 28th Annual Third-Party Logistics Study.” The study—which is authored by supply chain professor and researcher Dr. C. John Langley of Penn State University with support from NTT DATA and Penske Logistics—was released yesterday at the Council of Supply Chain Management Professionals’ Annual EDGE Conference.
While satisfaction levels for both shippers and their 3PL providers have historically been over 90%, last year’s report saw shipper satisfaction levels slip to 83%.
“My feeling is that COVID was hard on both parties," explains Tim Brindley, vice president of supply chain consulting at NTT Data. "Shippers needed additional capacity to take on inventory, the capacity wasn’t available (both warehouse and trailer), and it was a struggle on both sides to accommodate that surge. Coupled with warehouse labor shortages and trucker shortages, both sides were feeling the burn.”
Now that capacity has loosened up, shippers are back in the driver's seat, and this year’s report has seen a return to historic levels of satisfaction. Additionally, 80% of shippers said their 3PL had helped them to reduce overall logistics costs, and 89% said their 3PL had helped to improve service. Furthermore shippers are looking to increase the number of services that they outsource, according to 87% of 3PL respondents and 62% of shipper respondents.
However, many shippers are looking for more from their 3PL in terms of technology expertise. The percentage of shippers who say they are satisfied with their 3PL’s IT capabilities dropped to 49% from 54% last year. One technology problem area appears to be data sharing and data quality. More than half (57%) of shippers and 32% of 3PLs say they have problems with data quality.
Meanwhile shippers (87%) and 3PLs (94%) agree that the adoptions of emerging technology is vital to the future growth of their supply chains. The top areas of interest are advanced predictive analytics, wearables and mobile technology, consolidated e-commerce platforms, and warehouse automation and robotics.
On the people side of the equation, the labor market may not be as tight as last year, but both shippers and 3PLs are still struggling to fill some key positions, such as pickers and packers, truck drivers, and equipment operators. These labor challenges have had repercussions with 78% of shippers and 40% of 3PLs saying it have impacted their ability to meet service-level agreements.