Lean inventories, time-sensitive deliveries, and shorter product lifecycles demand effective supply chain management.
3pl industry trends 2018
Moreover, LAMEA is expected to witness the highest growth rate, owing to rise in trading activities due to globalization. Transport Insights The roadways segment captured the highest revenue share in , being valued at well over USD Healthy growth of global economies and rise in demand for e-commerce products have tightened the airfreight capacity and fueled the growth of International Transportation Management ITM. Interest in gainsharing may be diminishing somewhat due to slight improvements in the global business economy. Measurable Benefits: Shipper respondents experience measurable benefits from 3PL services, as seen in Figure 3. Mexico is one of the major exporters of manufacturing goods that include electrical machinery and equipment, automobile parts, and medical apparatus. This may be an indicator of the continuing impact of the global economic recession. Demand for 3PL services in the automotive sector is also expected to witness considerable growth.
Other consequences include late payments, not renewing a contract and negative word of mouth. Shippers also report improvements in order fill rate and order accuracy resulting from use of 3PLs, although the absolute levels of these metrics are a little lower than those reported in both the and 3PL Studies.
Shippers consider logistics and supply chain management as key contributors to their overall business success, and approximately three-quarters of survey respondents say 3PLs provide new and innovative ways to improve logistics effectiveness.
2019 third-party logistics study
Regional Insights The Asia Pacific third-party logistics market was the largest revenue generator in , capturing over Emerging information technology and logistics software such as warehouse management system, transport management system, and vendor managed inventory are expected to increase the competition in the coming years. Total logistics expenditures include transportation, distribution, warehousing and value-added services. Current Global Economic Climate and Use of 3PLs As acknowledged in our Annual 3PL Studies over the past two to three years, economic volatility and uncertainty have impacted global business markets and in turn, global markets for 3PL services. Measurable Benefits: Shipper respondents experience measurable benefits from 3PL services, as seen in Figure 3. Furthermore, continued retail formalization and establishment of low-cost manufacturing units in the region are offering new growth opportunities for third-party service providers. Many 3PLs are already making significant investments in technology. Stringent product tracking requirements, coupled with rising need for cold chains, is expected to drive the industry.
Companies who outsource their logistics to specialized 3PL players have managed to considerably reduce their capital expenditure CAPEXmitigate risks, and more importantly, focus on the core competencies of their business operations, which helps them gain a high degree of competitive advantage.
Despite this improvement, the opportunity remains to further narrow the gap between these two ratings. Figure 7 is a summary of the types of logistics services provided by 3PLs participating in the survey and reveals that many 3PLs provide a wide range of services.
The 3PL market holds a substantial scope for growth globally.
While many shippers consider gainsharing to be a useful incentive for themselves and their 3PL providers to work toward agreed-upon objectives and in keeping with the principles of good collaboration, others seem to feel that the basic agreement with a 3PL should cover all areas where performance is expected, and that it is not necessary or appropriate to engage in gainsharing practices.
This has helped companies cater to semi-urban regions, thus expanding their geographical reach.
3pl profit margins
Furthermore, continued retail formalization and establishment of low-cost manufacturing units in the region are offering new growth opportunities for third-party service providers. In effect, the starting line has been re-set, injecting a new, highly invigorated and highly competitive spirit into the logistics business environment. While there is a certain logic behind using these concerns to support a decision not to outsource, our discussions with shippers indicate that sometimes these very issues are used by other companies to justify their decision to outsource certain logistics services. Based on findings from last year, it is very common for 3PLs to offer many, or even most, of the range of services included in the question: the typical model is for 3PLs to offer a substantial number of services to respond effectively to their customers and their logistics needs. There is heightened need for more efficient logistics operations, with U. The market is in its growth stage; however, its contribution to the global market would increase significantly within the next six years. Growing number of government initiatives and increasing investments to develop road transport networks to boost freight forwarding have led vendors to adopt road transportation modes.
Further analysis of the available data confirmed that the higher the sales category, the higher the average number of logistics activities outsourced. Increased investments to enhance route optimization and visibility are expected to drive demand for 3PL services in the region.
The market is highly competitive with several large companies strategically forming alliances with mid-sized or small-sized companies to leverage their regional capabilities in logistics.
Third party logistics research paper
Liberal government policies for free trade agreements and development of the e-commerce industry drive the growth of the market. Automotive manufacturers are spinning off their internal logistics departments and distribution networks in the wake of adopting these services. The number of usable survey responses continues to rise each year, with a significant increase for the Study. Current State of the Market: Key Takeaways Key findings regarding the Current State of the Market for the 16th Annual 3PL Study include: 3PLs Make Valued Contributions: Again in , companies across industries and around the globe regard logistics and supply chain management as key components of their overall business success, and many credit their 3PLs with helping to provide new and innovative ways to improve logistics effectiveness. Additionally, 73 percent of 3PL users and 91 percent of 3PL providers agree that 3PLs offer new and innovative ways to improve logistics effectiveness. John Langley, a professor at Penn State University and the founder of the report, said shippers and their logistics partners will need to capture information and make it relevant. An integrated cloud-based platform enhances the value and adds flexibility to the outsourcing process. Economic growth in India and China is augmenting regional growth. A cohesive aim to develop logistics infrastructures and growth in new road-concession models are propelling the growth of 3PL services through roadways. FTAs have increased merchandise trade between partner countries, thus driving demand for 3PL services. Increasing emphasis on developing a logistics infrastructure and a public-private partnership model for highway construction is boosting the growth of 3PL services through road transportation. Service providers are striving to reduce the complexity and costs of their supply chain by improving the control over it, in order to accomplish effective management of a purchased transportation process.
based on 38 review