Improving Logistics through Partnerships with 3PLs

December 20, 2021
By Sue Doerfler

Logistics leaders have lately faced a variety of challenges, including such issues as visibility into their supply chains and capacity needs. For many, collaborating with third-party logistics providers (3PLs) has helped ease shipping disruption.

“Logistics outsourcing to third-party logistics providers has been on the rise for a while, and there is no indication that this will change anytime soon,” said David Gonzalez, vice president analyst with the Gartner supply chain practice. “However, logistics leaders are grappling with significant challenges that they can only address in collaboration with their 3PL partners.”

Gonzalez’s comments were featured in a press release about Gartner’s recent logistics outsourcing report, in which 298 supply chain professionals in the U.S., Europe and the Asia/Pacific region were surveyed about supply chain outsourcing decisions. How to Resolve the Shipper and 3PL Dichotomy of Logistics Outsourcing found that in 2021, two-thirds of logistics leaders increased their logistics outsourcing budget, and nearly three quarters (74 percent) of respondents expect to do so over the next two years.

In the survey, Gartner, the Stamford, Connecticut-based global business research and advisory firm, asked respondents about their logistics priorities and use of 3PL providers. The top three priorities were improving or updating technology (37 percent), cost reduction/cost optimization (31 percent), and increasing customer satisfaction (29 percent). Outsourcing partners can help companies accomplish these priorities — but there is often a disconnect between them, Gartner says. To have a successful partnership, both sides must collaborate and be willing to compromise.

“For example, a 3PL can upgrade or acquire new technologies on behalf of their shipper customer,” the press release states. “However, this will only be an option for the 3PL if the shipper extends (its) contract agreements to allow the depreciation of the investments and/or partly shares the financial burden with the 3PL partners.”

 The survey also found that 3PL service providers had a positive or extremely positive effect on shippers’ competitiveness, as noted by almost two-thirds of respondents. “This is the perfect foundation to build a long-lasting and meaningful partnership that enables joint investments and transparent information exchange,” Gonzalez said.

According to Gartner, requirements for a productive and collaborative relationship are:

  • An understanding of each other’s capabilities and needs
  • The ability to listen to each other, so expectations can be managed
  • Identification of future opportunities.

“The 3PL community has a lot to offer, and the shipper community has a lot to gain,” Gonzalez said. “In the face of ongoing disruptions, growing carrier influence and customer selection, shippers and 3PLs must work together to mutually protect their vested interests. If they can enter a trusted relationship, there’s lots of room for future innovation and opportunities.”

(Image credit: Getty Images/Busakorn Pongparnit)

About the Author

Sue Doerfler

About the Author

As Senior Writer for Inside Supply Management® magazine, I cover topics, trends and issues relating to supply chain management.