2024年全球第三方物流研究：物流外包新纪元

2024

ONTToaTa

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Third-PartyLogistics

Study

ThePowerofPartnership:ExploringCollaborationThroughDataandInnovation

ResultsandFindingsofthe28thAnnualStudy

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Whatyouwillfindhere

04CurrentStateofthe3PLMarket

17ThePowerofPartnershipsNow

26TheFlowofData

36LookingBeyondtheHypeofTechnology

46ContinuingtheConversation:

TheUntappedPotentialofReverseLogisticsUnderstandingtheTalentCrisis

58ContemporaryIssues

TheEfficiencyandResiliencyStruggleOngoingGrowthoftheColdChain

TheOnlineShoppingSlowdown

64AbouttheStudy

67AbouttheRespondents

70AbouttheSponsors

SupportingAdvisors

ExecutiveSummary

CurrentStateofthe3PLMarket

Relationships,collaborationandcustomerserviceareatthecenteroftoday’ssupplychains.Shippersandtheirlogisticsprovidersareformingstrategicpartnershipstoaddvalue,enablebetterdecision-makingandmanagecostswhile

providingagilityandresiliency.

Thisyear’sstudyshowsthatmostshippers(95%)agreetheirrelationshipswith3PLsaresuccessful.Asinpaststudies,3PLstypicallyrespondmorefavorably,with99%agreeingtheir

relationshipsaresuccessful.

Moreimportantly,relationshipsaredrivingresults,with89%ofshippersreportingthat3PLscontributedtoimprovingserviceand80%saying3PLshelpedreduceoveralllogisticscosts.

Warehousingwasthemostoftenoutsourcedactivity,followedbydomestictransportation,customsbrokerageandfreight

forwarding.Companiestendtooutsourcestrategicand

customer-facingactivities,includingITservicesandcustomerservice,somewhatlessthanthosethataremoretacticalandoperational.

Technologyisbehindmanyoftheinnovativesolutionsinthesupplychain.CapableITserviceshavebeenakeyfactorinthevaluepropositioninshipper/3PLrelationships,butthe

percentageofshippersindicatingthey’resatisfiedwiththeITcapabilitiesof3PLsdecreasedslightlythisyear,droppingto49%from54%lastyear.

However,3PLcapabilitiesappeartobewellmatchedwiththe“musthaves”shippersexpect.Themostfrequently

citedtechnologiesremainthosethatareexecution-andtransaction-based.Theyincludetransportation

management-planning(62%),warehouse/distributioncentermanagement(59%)andtransportationmanagement-

scheduling(57%).

ThePowerofPartnershipsNow

Dependable,successfulrelationshipsareessentialto

dynamicandeffectivesupplychainpartnerships,butthepowerdynamicsinrelationships—thedifferentways

partnersbehavetoinfluenceeachother—canshiftovertime.

Giventhedisruptiveandsignificantshiftsincapacity

experiencedinrecentyears,thisyear’sstudylookedathow

thepowerdynamicin3PLandshipperrelationshipshas

changedoverthepastthreeyears.Bothpartiessaidshiftingpowerdynamicsimpactedthem,with39%ofshippersand3PLsagreeingthatshippershavegainedleverage.

Thatshiftcanbeapparentduringcontractnegotiations.Manyshippers(89%)saidcostsavingswereatopprioritywhennegotiatingnewterms.Duringnegotiation,both

partiesalsovalueservice-levelagreements(SLAs)and

flexibleterminations.Thelengthofcontractsisontheriseinsomeareas,with38%ofshippersand3PLsreportinganincreaseinaveragecontractlength.

Morethanhalfof3PLs(63%)saidthey’veadjustedtheir

proposalqualificationprocess.Reasonsfordeclining

potentialbusinessopportunitiesincludelowprofitmargins,requestedservicesdidn’talignwiththeircapabilitiesandalackofconfidenceinapotentialcustomer’sRFPprocessormaturitylevels.

TheFlowofData

Data,analyticsandintelligenceareoptimizingsupplychainperformance,andtheamountofdataflowingbetween

shippersand3PLscontinuestogrow.Themostcommondatasharedwithexternalsupplychainpartnersrelatestotransportation/logisticsperformance,inventorylevels,supplierperformanceandorderhistory.

Datasharingcanhaveitschallenges,with57%of

shippersand32%of3PLscitingissueswithdataqualityasatopconcern.Otherchallengesincludeintegrationandtechnologybarriers,datastandardissuesandcost.

However,bothpartiessaidtheytakeseveralstepstoprotectdataquality.

3PLsarefocusedondrivingoperationalvalueoutofsupplychaindata,andagreaterpercentageof3PLsreportedusingdashboards,organizingandassessingreal-timedata,and

collectingdatacomparedtoshippers.

Datacanalsohelpautomatesupplychaindecision-making.

Shippersderivevaluefromautomatedsupplychain

planning,demandforecastingandinventorymanagement.3PLscitedthegreatestvalueinrouteoptimization,

inventorymanagement,andfreightinvoicingandbilling.

LookingBeyondtheHypeofTechnology

Technologyservesasacompetitivedifferentiator,and

nearlyallrespondents(87%ofshippersand94%of3PLs)

agreethatemergingtechnologyadoptioniscriticaltofuturegrowthandoverallsuccess.Adoptionisunderway,with83%ofshippersand39%of3PLsreportingthey’reeitheralreadyworkingtogetherorplantointhefuture.

Bothpartiespointedtospecifictechnologiesthathold

value.For3PLs,it’sahigherpriorityonpredictiveanalytics,

warehouseautomation,andwearablesandmobile

technology.Bothpartiesalsoalignontheusefulroleofsupplychaincontroltowers.

Thetopreasonsforinvestingintechnologyaretoimproveprocessefficiencyandproductivity,reduceoperational

costsandimprovevisibility.However,barrierstoadoptionremain.Themostcommonchallengesincludethelackofaclearbusinesscase,capitalandtalent.

Theincreasedadoptionoftechnologyisgeneratingmore

datathroughoutthesupplychain.Thisdatawilllenditselftousingadvancedtechnologies,suchasartificialintelligence(AI)andmachinelearning(ML).Whencoupledwithhumanexpertise,thesetypesofapproachesarepoisedtofurthertransformtrucking,maintenanceandlogistics.

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ContinuingtheConversation:UnderstandingtheTalentCrisis

Supplychainsrelyontheavailabilityanddevelopmentoftalent,andlaborisatop-of-mindconcernforshippersand3PLs.Whilehiringchallengeshaveeasedsomewhatoverthepastyear,78%ofshippersand40%of3PLssaidlaborchallengeshaveimpactedtheirSLAs.

Thehardestpositionstofillarehourlyworkers,suchaspickersandpackers,andlicensedhourlyworkers,suchastruckdriversandequipmentoperators.Thosepositionsarealsoamongthemostdifficulttoretain.

Shippersand3PLssaidthey’readoptingtechnologyandautomationtoincreaseefficiency,makeworksaferandattractemployees.Bothpartiessaidactiveimplementationandresearchoftechnology-relatedsolutions

isongoing.

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ContemporaryIssues

Withinthecontemporaryissuessection,thestudyteam

evaluatedcriticalissuesshippersand3PLsfaceintoday’ssupplychainsthat’llshapethefuture.Thisyear’sstudyfocusedonthebalancebetweenefficiencyandresiliency,thecontinuedgrowthofthecoldchainandthechanginglandscapeofonlinesales.

Supplychainresiliencyisafundamentalprinciplethat’sgainedmoreattentionsincethepandemic.Shippersareworkingto

balancetheneedforresiliencywithinventoryholdinglevels,

sourcesofsupplyandcost.Informationhelpsshippersand3PLsmakedata-drivendecisions,craftcontinencyplans,andoptimizenetworkstohelpmanagedirectandindirectcosts.

Demandforfreshandfrozenlogisticsremainsstrong.Coldchain

logisticsprovidersareadoptingautomationtohelpincrease

efficiency,meetregulatoryrecord-keepingrequirements

andachievegreatervisibility.Supplychainoptimization

withinthecoldchainhasseveralpotentialbenefits,including

controllingcosts,minimizingfoodwasteandmeetingcustomerexpectations.

Direct-to-consumeronlinesalesthatspikedduringthepandemichavestartedtoease,andshippersandlogisticsproviders

aretryingtomeetendusers’ever-evolvingneeds.Real-time

visibility,predictivedataanalyticsandcollaborationtools

providevalueascompaniesoptimizebrick-and-mortarlocations,manageinventoryandcontrolcostswhilealsoprovidingan

exceptionalcustomerexperience.

CurrentStateofthe3PLMarket

The202428thAnnualThird-PartyLogisticsStudyprovidesthe

latestperspectivesonshipperand3PLrelationships.Italso

coverstheprioritiesofbothgroups,whatmakesrelationships

successfulandhowthey’remeetingtoday’ssupplychainneedswhilepreparingforfuturedemand.Shipperscontinuetohave

highexpectationsoftheirlogisticsandsupplychainservice

providers.Providersarerespondingwithincreasedtechnologicalanddigitalcapabilities,improvedservicelevelsandgreater

efficiency.

TheAnnualThird-PartyLogisticsStudycontinuestoshowthatshippersandthird-partyprovidersexperiencepositivebenefitsfromtheirrelationships.Mostshippersthatuse3PLservices

(95%)reporttheirrelationshipsasgenerallysuccessful,upfrom83%lastyear.Asinthepast,3PLsrespondedmorefavorablythanshippers,with99%(thesamepercentageaslastyear)

reportingsuccessfulrelationships.

Figure1:Shipperand3PLViewsofRelationshipTrends

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ExpectationsinShipper/3PLRelationships

Thoseinthesupplychainremainfocusedontheimportanceofrelationships,collaborationandservice.3PLsremainconfidentthattheirworkisprovidingvaluebyimprovingservicetotheircustomersandreducingoverallsupplychaincosts.Among

respondents,89%ofshippersand100%of3PLssaid3PLs

contributedtoimprovingservice.Amongshippers,80%said3PLscontributetoreducingoveralllogisticscosts.

Bothshippers(62%)and3PLs(87%)saidshippersare

increasingtheiruseofoutsourcedlogisticsservices,upfrom

54%and81%lastyear,respectively.However,therewasan

increaseinthenumberofshippersreportingreducingor

consolidating3PLs,whichgrewto78%from71%.Among

3PLs,84%agreedshippersarereducingorconsolidating3PLs,a9%decreasefromlastyear(seeFigure1).

3PLUserSpendingPatternsonLogisticsand3PLServices

Amongrespondents,shippersreportedtotallogistics

expendituresasapercentageofsalesrevenuesaveraged13%.Thisresultisaslightdecreasefromthe14%reportedinthe

2023study.

Totallogisticsexpenditurescontinuetotrenddownward,withshippersreporting37%oftheirtotallogisticsspendisdirectedtowardoutsourcing.Whileshippersstillreportanincreased

demandinoutsourcedservices,thisislikelyattributabletovolumedeclineorreduced3PLpricingpower(seeFigure2).

Thenumberofshippersthatsaidthey’recollaborating

withothercompaniesandcompetitorstoachievecostand

serviceimprovementsdroppedto50%from52%.However,thepercentageof3PLsseeingincreasedcollaborationto

achievecostandserviceimprovementsroseto85%from75%previously.

Figure2:SelectFinancialofAspectsofUsers’Logisticsand3PLExpenditures

WhatShippersReportOutsourcing

Eachyear,theAnnualThird-PartyLogisticsStudyasks

shipperstoindicatewhichlogisticsservicestheycurrently

outsourcetoa3PL(seeFigure3).Thisyear’sstudy

alsoincludesthepercentagesfromlastyear’sstudyforcomparisonpurposes.

Day-to-daytasksremainsomeofthemostoutsourcedtasks.Domestictransportation,freightforwarding,warehousing,customsbrokerage,internationaltransportation,and

transportationplanningandmanagementareallabout50%ofreportedoutsourcedservices.

Forshippers,warehousingwasamongtheservicesthatsawthelargestincreaseinoutsourcing,jumpingto65%from

43%inthe2023study.However,it’sinterestingtonotethatthisisessentiallyareturntonormallevels.Thepriorfive-yearoutsourcingaveragehoveredaround65%.

Transportationplanningandmanagement,ordermanagementandfulfillment,andproductlabeling,packagingandassemblyalsosawincreases.

Outsourcingmorestrategicandcustomer-facingactivitiestendstobesomewhatlessthanitisformoretacticaland

operationalactivities.Someoftheactivitiesinthiscategoryarecross-docking(35%),ordermanagementandfulfillment(23%),customerservice(14%),leadlogisticsprovider/4PL

services(13%)andITservices(13%).

Amongservicesthatsawthelargestdecreaseinoutsourcedservicesweredomestictransportation,servicepartsand

maintenance,andfreightforwarding.Whileit’snotdefinitivewhythesechangesoccur,theshiftintruckingcapacity

couldbeadirectlyrelatedfactor.Capacitywastight

throughout2020and2021andbeganlooseningin2022andthroughout2023.

Figure3:ServicesShippersareOutsourcing

Figure4:ShipperViewsofIT-BasedCapabilities

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3PL’sITCapabilities:

AnalysisofShipperPreferencesand3PLCapabilities

Technologycontinuestotakeongreaterimportancewithinthesupplychain,especiallyasshippersworktoboosttheiragilityandresiliency.Astechnologyincreasestheamountofdataavailable,shippersandtheirlogisticspartners

areworkingtotransformdataintousableinformation.Itcanhelpreducecosts,improveassetusageandimproveservice.

TheroleofITandhowitimpactsrelationshipsbetweenshippersand3PLsisalwaysamuch-anticipatedsectionoftheAnnualThird-PartyLogisticsStudy,whichtraditionallybeginswithanupdatetothe“ITGap.”

Nearlyallshippers,97%,saidITcapabilitiesareanecessaryelementofoverall3PLproviderexpertise.

Inthecurrentstudy,49%ofshippersindicatedthey’re

satisfiedwith3PLs’ITcapabilities,downfrom54%lastyearand58%in2022.Interestingly,shippersidentifiedmoreITcapabilitiesthantheyhaveinthepast.

Figure4summarizessurveydatafromtwosources.

Thefirstisshipperresponsestothequestion:“Which

informationtechnologies,systemsortoolsmusta3PLhavetosuccessfullyserveacustomerinyourindustryclassification?”Thesecondis3PLresponsesaboutthetypesofIT,systemsandtoolsusedbytheircompanytosuccessfullyservetheirclients.

Themostoftencitedmust-havetechnologiesshippers

valueintheirrelationshipswith3PLsaremoreexecution-

andtransaction-based.Theseincludetransportation

management-planning(62%),warehouse/distributioncentermanagement(59%)andtransportationmanagement-

scheduling(57%).Halfofshipperssaidthey’relookingforadvancedanalyticsanddataminingtools.

Severaltechnologiesexperiencedadeclineinimportanceyear-over-year:cloud-basedsolutions(35%),warehouse

automation(31%),andwebportalsforbooking,order

tracking,inventorymanagementandbilling(26%).The

resultsdon’tsuggestalackofimportanceforthese

capabilities,butsimplyadeclineinpercentagescomparedtoothercapabilities.

ThedatainthelastcolumnofFigure4indicatesthat

reported3PLcapabilitiesarewell-alignedwiththe“musthaves”shippersreported.

KeyTakeaways

KeyfindingsfromtheCurrentStateoftheMarketforthe202428thAnnualThird-PartyLogisticsStudyinclude:

•Shippersusinglogisticsprovidersandprovidersof3PLand/or4PLservicesbothhavepositiveevaluationsoftheirrelationships.Thisyear,95%ofshippersreporttheir3PLrelationshipsaregenerallysuccessful,while99%of3PLsagreetheirshipperrelationshipsaresuccessful.

•Shippersusing3PLscontinuetoagreethat3PLuse

contributestoimprovingservicetotheircustomers.Theyalsofeelthat3PLsprovidenewandinnovativewaysto

improvelogisticseffectivenessandreduceoverallsupplychaincosts.

•Morethanhalfofshippers(62%)saidtheyincreasedtheiruseofoutsourcedlogisticsservices,while87%of3PLs

reportedanincrease.Therewasalsoanincreaseinthenumberofshippersreportingreducingorconsolidating3PLs,whichgrewto78%from71%.

•Thenumberofshippersthatsaidtheycollaboratewith

othercompaniesandcompetitorstoachievecostand

serviceimprovementsdroppedto50%from52%.However,thepercentageof3PLsseeingincreasedcollaborationroseto85%from75%.

•Usersof3PLservicesreportthat37%oftheirtotal

logisticsexpendituresrelatetooutsourcing,whichisaslightdecreasefromthe40%reportedlastyear.

•Predictably,themoreoperationalandday-to-dayactivitiesareamongthemostoftenoutsourced3PLservicesby

shippers.Theseincludewarehousing,domestictransporta-tion,freightforwardingandinternationaltransportation.

•Amongshippers,49%indicatedtheyweresatisfiedwith3PLITcapabilities.

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ThePowerofPartnershipsNow

Sinceitsfounding,theAnnualThird-PartyLogisticsStudy

hasfocusedonmanyaspectsofrelationshipsbetween

shippersandlogisticsandsupplychainserviceproviders.

Thereportshaveservedassomewhatofanannualphysicalexamfortheserelationships,documentingthewaysthey’veevolvedandgrownovertheyears.For28years,researchershaveobservedsignificantchangesandenhancementsin

thestructureandfunctioningoftheserelationships.They’veseenthembecomerecognizedasessentialtothesuccessofend-to-endsupplychains.

Today,90%ofFortune500companiesuse3PLs,accordingtosupplychainconsultancyArmstrongandAssociates,

whichistwicewhatitwasmorethan20yearsago.

“Backinthe1990s,whenpeoplegotseriousabout

using3PLs,itwasforscale,andtheywerelookingfor

corecompetenciestheydidn’thave.Thisiswhenbasic

warehousinganddistributionserviceswerethebackboneofwhat3PLsdid,”explainedKevinSmith,presidentof

SustainableSupplyChainConsulting.

Shipperperspectivessuggestthatthecorecompetenciestheylookforin3PLshavechangedinrecentyears.For

example,today’s3PLsgobeyondmovingproductsfrompointAtopointB.Theyprovideservicesrelatedtodatamanagement,analytics,inventoryvisibilityandnetwork

optimization.“It’shardtobuildthosecompetenciesinsideofyourowncompany,”Smithsaid.

Inthecontextofrelationshipsamongshippersand3PLs,

eachpartyneedstomeetitsownobjectivesaboutsuccess.However,theholygrailiscreatinganddeliveringvaluetoend-usercustomersandconsumers.

“Mostsuccessfulsupplychainleaderslookfora

dependable,relatablerelationshipthatismeaningfulforbothsides,”saidMarkBaxa,CEOoftheCouncilofSupplyChainManagementProfessionals.“It’stwomindscomingtogetherandneedingeachothertocreatesomething

neitheronecouldhavecreatedontheirown.”

Deliveringendvaluerequiresshippersand3PLstooptimizetheirrelationships.Theymustalsoalignandcoordinatewiththeneedsoftheoverallsupplychain.

“Creatingapositivecustomerexperienceandbuilding

strongrelationshipsarethetopwaysfor3PLstoincreasecustomerretention,and3PLsthatcontinuallystriveto

meetandexceedtheexpectationsoftheircustomersdrivecustomerloyalty,”saidDr.C.JohnLangley,founderoftheAnnualThird-PartyLogisticsStudyandclinicalprofessor

ofsupplychainandinformationsystemsatPennStateUniversity.

Dr.Langleyaddedthatthere’sasignificanttrendamong

shipperstoplaceapriorityonsupplierrelationship

management(SRM).Ithelpsfacilitateandenrichtheir

relationshipswith3PLs,whichmaybemeaningfuland

interactive.Theserelationshipsmayalsoinvolveadegreeofalignmentandcollaborationthat’llbeofgreatbenefittobothpartiesaswellasthesupplychain.

Inadditiontoexchangingdailyoperationalinformation,thiscouldincludeshipperssharingforward-lookingdemand

forecastinformationthat’dbehelpfulto3PLs’planning.Shippersthathaveyettobuyintotheconceptofsuch

relationshipswillmissopportunities.Buy-inhelpsachievethelevelsofefficiencythataresoimportanttoshippers’successandtothatoftheoverallsupplychain.

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ShiftingPowerDynamicsforShippersand3PLs

Capacityhasloosenedandthesupplychainhasreturnedtonormaloverthepastthreeyears.Thoseinthesupplychainhavelookedathowthepowerdynamicin3PLandshipperrelationshipshasshiftedduringthistime.

Theconceptofpowerdynamicsislikeoperatingina

“buyer’smarket”versusa“seller’smarket.”Itrelatesto

whichpartyinarelationshiphassomecombinationof

greaterinfluence,expertiseorcontrol.Orcaninnovateordealwithopportunitiesorchallenges.

“Thenaturaltendencyisthatwhenthependulumshiftsonewayortheother,sogoesthepower,”Baxasaid,adding

thatoverthepastyear,transportationcostsanddemandforcapacityhavebothdropped.“Rightnow,theleverageinthemarketwe’reintodaynaturallyswingstotheshipper.”

Thisyear’sresearchsupportstheconceptthatthepower

dynamichashadimpactsonbothshippersand3PLs.Inthepast,shippershadmoreleverage.Amongrespondents:

39%ofshippersand38%of3PLssaidshippershavegainedleverageoverthepastthreeyears;30%ofshippersand31%of3PLssaid3PLs/4PLshavegainedleverage;and31%of

bothshippersand3PLssaidthere’sbeennochange(seeFigure5).

Powerdynamicsoftenplayaroleinrelationships,withthe

healthiestrelationshipstypicallysharingpowertocreatea

strongpartnership.“Theelementsofpowerandpartnershipneedtobecarefullycraftedandbalancedtonotonly

meetthesuccessobjectivesforeachoftheseparties

butalsoalignwiththesuccessobjectivesfortheoverallsupplychain,”Langleysaid.“Thisrequiresasignificant

commitmenttothepursuitofalignment,cooperationandcollaboration.”

Evenasthesedynamicshaveshiftedslightlyinfavorofshippers,78%of3PLsindicatedanincreasecustomers

servedoverthepastthreeyears(seeFigure6).Also,67%reportedanincreaseinthenumberofcustomersthey

considertobestrategicoverthesametimeframe.

Figure6:3PLCustomerGrowth

WhatShippersWantin3PLNegotiations

Notsurprisingly,mostshippers(89%)saidoneoftheir

topoutcomesduringcontractnegotiationswith3PLswas

costsavings(seeFigure7—respondentscouldselect

theirtopthreeoutcomes).Morethanhalf(56%)alsoseek

processimprovementcommitments,and48%wantcapacitycommitments,bothofwhichcantranslateintofinancial

benefits.

Somewhatdisappointingwerethelower-rankedoutcomesrelatedtoperformancemetrics,technologyinnovationandenhancementofdatasharingrequirements.

Figure5:Shipper/3PLShiftingPowerDynamic

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“Whilecostsareimportantfromafiduciaryperspective,

improvementandcapacitycommitmentsmaycontributetotheoverallvaluethatmaybecreatedinarelationshipwitha3PL,”Langleysaid.

Baxanotedthatit’simportantforshipperstoconsiderdirectandindirectcostsrelatedtothesupplychain.“Oftentimes,wespendtimefocusingondirectcostswhenthemarketisdown,”hesaid.“ButwhatoptimizationorsuboptimizationisavailabletomeifI’vepartneredwithsomeonewhocantakenon-value-addedcomplexityoutofmysupplychainthat

ultimatelyleadstocost?Theuseoftherightdigitaltoolsandtherighttimingcanaddtremendousvalue.”

Additionally,long-termrelationshipsmatter.“Whatwe

shouldbeachievingisn’tjustaboutprice,butalsoreliabilityofservice,”Baxasaid.“Shippersarelookingforresiliencyandwantpartnerswhoareabletorespondinthefaceof

adversity.”

Forthefirsttime,researchersaskedshippershowoftentheyconductmarketanalysisandbenchmarkingof3PLservices(seeFigure8).Amongrespondents,29%reporteddoingsowhennecessaryand25%saidtheydosoannually.Another19%conductmarketanalysisandbenchmarkingduringa

contractrenewal.

Langleydetailedseveralinitiativesthatshouldbefront

andcenterwhenshippersand3PLsworktoward“win-win”solutionswhennegotiatingnewcontracts.Theseinclude:

•Identifyingshippinglanesandpick-up/delivery

alternativesthatcreateefficienciesforbothshippersand3PLs

•Strategicuseofkeyperformanceindicators(KPIs)tofocusattentiononoperationalprioritiesandproceduresthat

benefitbothparties

•Longercontractsthatmayhelpjustifystrategicinvestmentsbyshippersand3PLs

•Establishingregularbusinessreviewopportunitiesto

evaluatepastperformanceandshareinformationthatcanhelpenhancefutureperformance

•Considerlogicalexpansionsofserviceofferingsthatcanhelp3PLsmeetabroaderrangeofshipperneeds

Figure8:FrequencyofMarketAnalysisandBenchmarkingof3PLServices

Figure7:Shippers’DesiredOutcomesfromNegotiation

Figure9:CommonlyLeveragedContractingElements

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ImportanceofContractingElements

Contractnegotiationsareanimportantpartofshipperand

3PLrelationships.Whenenteringacontract,shippersand

3PLstypicallypredeterminethespecificelementsthey’dliketoleverage.Figure9identifiescriticalcontractingelementsandthepercentagesofshippersand3PLsthatcommonlyleveragethemintheircontracts.

Bothparties,including79%ofshippersand77%of3PLs,

rankedSLAsasatopchoice.“Thisisunderstandableandactuallyexpected,astheSLAsetstheexpectationsfortheperformanceofthelogisticsserviceprovider,”Langleysaid.“Also,shippersmaybenefitbybeingabletocomparethecontentofSLAsprovidedbyseveralcompetingpotential

suppliers.”

OfinterestisthatneitherpartywasaspositiveaboutusingSLAswithfinancialpenaltiesforbreachesofperformance.

Flexibleterminationalsorankedamongthetopcommonlyleveragedelements.However,thereappearstobea

differenceinpriorities:63%ofshippersciteit,butonly40%of3PLsdo.

Otherfrequentlyidentifiedcontractingelementsinclude

continuousimprovementtargets,contractextensionsand

guaranteedvolumes/capacity.AlthoughnotshowninFigure

9,researchresultsindicatedthatneithershippersnor3PLs

attachedmuchimportancetocontinuousimprovementtargetswithfinancialpenalties.

“Contractualcontinuousimprovementgoalsorvariationsofgainshare/painsharelanguagetodrivecontinuous

improvementaremosteffectiveasacommunicationtoolbetweentheshipperandtheir3PL,”saidTimBrindley,vicepresidentofsupplychainconsultingatNTTDATASupply

ChainConsulting.“Oncethoseobjectivesbecomeameansofbeingpunitivetowardthepartner,therelationshipwillquicklydevolve.”

Last,andamongthelesser-ratedcontractelements,were

requirementsrelatedtoenvironmental,socialandgovernance(ESG)practicesandtodiversity,equityandinclusion(DE&I)

initiatives.Whiletheremaybebeneficialresultsassociatedwiththeseelements,respondentscurre