Analyzing the 2016 Third-Party Logistics Study

Third-party logistics (3PL) companies continue to evolve to meet the needs of their clients. Each year, Datex Corp. releases the Third-Party Logistics Study and analyzes how the industry is evolving. Details from the 2016 report reveal a technology-focused environment designed to improve efficiency and lower costs.

Discover some of the top four highlight points from this study and what implications they may have for your business

What Do Companies Say About the 3PL Industry?

Survey results show that 75 percent of shippers believe that 3PL providers use innovative solutions to enhance logistics effectiveness. About 88 percent of 3PLs agree with that statement.

This finding isn't surprising given how competitive the industry has become. Tech-savvy upstarts have also started to eye the industry for weak companies.

Some of the most key technological innovations used by the industry include the following:

  • GPS devices provide real-time location tracking for trucks and merchandise.
  • Automated modeling predicts when demand for products will increase or decrease.
  • Integrated software lets 3PLs optimize supply chains and inventory control by functioning as though they are a part of their clients' companies.

Additionally, 3PL companies are aware of technology's importance: 58 percent of them say they are investing in new technologies.

Services Shippers Are Outsourcing

Shipping companies don't always have access to the technology needed to take a strategic approach to logistics. Shippers, therefore, have come to rely on 3PLs to help them with the following:

  • Manage their warehouses for better efficiency and workforce productivity
  • Coordinate transportation options to reduce costs and boost efficiency
  • Analyze data to predict buyer behaviors
  • Increase visibility within orders and optimize inventory control

This list isn't true of all companies, but a trend has shown that today's shippers need the technology and experience of logistics providers.

Tactical and Strategic Buyers

The 2016 Third-Party Logistics Study reports that 37 percent of shippers consider themselves tactical buyers and 34 percent consider themselves strategic buyers. About 20 percent report they are a combination of the two groups.

Of course, if you haven't spent much time in this industry, you may not know what this data means. Put simply, strategic buyers focus on long-term, holistic supply line approaches that will benefit them for years to come. These buyers tend to spend money on enterprise resource planning (ERP) software that allows them to collect and analyze large amounts of data so they can make informed decisions.

Tactical buyers take a short-term approach so they can adjust quickly to changing business environments. These buyers tend to be small and medium-sized businesses that need to focus on immediate benefits while conserving money.

Meeting the Needs of 3PL Clients

Companies have their own distinctive needs, which is why logistics is such a challenge. Most 3PL clients, however, are looking for improvements in specific areas, such as the following:

  • Improving communications
  • Aligning their processes with customer needs
  • Finding more effective ways to collaborate

The areas above represent some of the areas where 3PLs thrive. Indeed, many organizations have started to realize that 3PLs can make them more successful.

Want to learn more about how 3PL services could benefit your company? Contact The Apparel Logistics Group (TALG) and one of our team members will gladly assist you.

Posted: 5/11/2016 11:45:10 AM by Global Administrator | with 0 comments

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