This Week in Leadership (Nov 29 - Dec 5)
Questions—and answers—about the Omicron variant's impact on organizations. Plus, critical year-end moves to boost your career.
Korn Ferry, through a partnership with Capgemini Consulting, Penn State University and global logistics provider Panalpina, has issued a comprehensive worldwide report examining the global market for outsourced logistics.
The success of the third-party logistics industry is evident in the generally high marks given to 3PLs by respondents to a survey as part of the 2013 17th Annual Third Party Logistics Study, which identifies trends and explores how both 3PLs and shippers are using these relationships to improve and enhance their businesses and supply chains. A substantial 2,342 industry executives provided usable responses to the survey, including users and nonusers of 3PL services as well as 3PL providers.
Despite challenging business conditions, aggregate global revenues for the 3PL sector continue to rise, and far more shippers (65%) are increasing their use of 3PL services than returning to insourcing (22%) some 3PL services. Nearly three in five (58%) shippers are reducing or consolidating the number of 3PLs they use. Shippers report spending an average 12% of revenues on logistics, and an average 39% of that figure is spent on outsourced logistics services. Outsourcing accounts for 54% of shippers’ transportation spend and 39% of warehouse operations spend. As found in past Annual 3PL Study surveys, transactional, operational, and repetitive activities such as transportation, warehousing, and freight forwarding tend to be the most frequently outsourced.
Both shippers (86%) and 3PL providers (94%) largely view their relationships as successful, with shippers posting some impressive results from outsourcing: just over half (56%) say their use of 3PLs has led to year-overyear incremental benefits. They also report significant savings from logistics cost reductions (15%), inventory cost reductions (8%) and logistics fixed asset reductions (26%). Shippers are more satisfied than 3PLs (71% to 63%) with the openness, transparency and good communication in their relationships, and 67% of shipper respondents judge their 3PLs as sufficiently agile and flexible.
Shippers’ openness to more strategic 3PL-shipper arrangements, including gainsharing and collaboration with other companies, appears to be declining somewhat. The IT Gap appears to have stabilized over the last few years, with 94% agreeing that IT is a necessary element of 3PL capability but just 53% indicating they are currently satisfied with 3PL IT capabilities. Contributors and potential solutions to this disparity are explored in the IT Gap section.