3PLs are playing multiple roles in their interactions with both carriers and shippers.
I’ve recently returned from the Council of Supply Chain Management Professionals 2016 Conference in Orlando, where a lot of discussion revolved around the growth in utilization of Big Data and analytics. That’s why I wasn’t the least bit surprised when I read an article in TruckingInfo.com, “3PL Segment Growing 2-3 Times Faster Than GDP.” This was based on a presentation by Robert Voltmann, president and CEO of the Transportation Intermediaries Association, given at the recent TMW/PeopleNet In.Sight user conference in Nashville.
According to Voltmann, 3PLs as an industry have been growing rapidly and now have revenues of about $157 billion a year. Tracking where that growth has come from, Voltmann said that “48% of all large shippers use two to three 3PLs and 38% use six or more.” Furthermore, 28% of carriers use 3PLs as their primary source of freight and 28% of LTL freight is handled by 3PLs.
How does this jibe with what we learned at the CSCMP Conference? Both carriers and shippers are looking for greater visibility and tracking capability along with business intelligence and analytics that will give them the insights necessary to make smarter business decisions. But the technology and analytics that make this possible is constantly evolving and carriers and shippers would rather invest their money in their core business rather than in technology that become obsolete soon after it’s been implemented. There’s also the consideration of hiring people with these special skillsets and provide the ongoing training necessary to keep up with changes.
This is where the 3PLs have made great inroads. Many are continually investing in cloud technology and expanding the services they provide. For instance, we’re in a situation right now where carriers have excess capacity they are looking to fill. They can contact a 3PL to find loads from shippers. Conversely, a shipper looking for the most advantageous delivery can contact the 3PL to find the right carrier. This greatly expands the flexibility for both shipper and carrier. And when it comes to shippers’ needs, in addition to the transportation function, 3PLs also offer an entire array of supply chain management functions. Plus, in today’s omni-channel environment with the growth of e-commerce, this flexibility and service expansion is especially important and can include warehousing, fulfillment, and reverse logistics.
Read more on 3PLs, read this blog by Victoria Kresge, Vice President of Dedicated Services for NationaLease.