CSCMP's Supply Chain Quarterly
Logistics
February 25, 2020
Forward Thinking

Logistics outsourcing to increase in 2020

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85% of logistics leaders expect their outsourcing budget to increase by more than 5% next year, study finds.

Logistics leaders expect their outsourcing budgets to increase by more than 5% in 2020, according to a December study by researcher Gartner, Inc. The results reflect the continuation of an existing trend, as 85% of logistics leaders reported a similar budget increase in 2019.

"Outsourcing one or more logistics service types has become largely mainstream," Courtney Rogerson, senior principal analyst with the Gartner Supply Chain Practice, said in a statement announcing the study's findings. "The question no longer is whether to outsource, but what and how much to outsource. Evaluating different outsourcing strategies has become a priority for logistics leaders."

That's because outsourcing logistics services helps organizations meet or exceed both their supply chain and overall business objectives, the authors said. About 70% of survey respondents said that outsourcing to third-party logistics providers (3PLs) and others has helped them achieve those goals. 

But where there is reward, there is risk. The study also found that specific challenges are associated with outsourcing logistics services, including the complexity of working with multiple partners, cybersecurity concerns, and the incompatibility of information systems between their organization and different 3PLs.

"Low-maturity organizations often outsource logistics with unrealistic expectations regarding ROI and service levels," Rogerson also said. "Outsourcing can help make your organization more efficient, but it requires a high degree of coordination. Make sure you have the appropriate resources and skills at your disposal."

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