With only five per cent of respondents to our annual Outsourcing Survey indicating they had no plans to outsource in the future, it seems clear that for Canadian Shipper readers at least, when it comes to transportation services the use of third party logistics providers (3PLs) is here to stay.
With more than half (57 per cent) of their total logistics expenditures currently directed to outsourcing, and more than three-quarters of respondents (88 per cent) using multiple 3PLs, the pie for providers is growing. But beware, the biggest single challenge facing shippers continues to be reducing costs (45 per cent) and while providers need to be cost competitive, service is also at the top of many shippers’ lists as they battle against price increases from 3PLs and demand continuous improvement in customer service at the same time.
When it comes to taking action to address concerns with 3PLs, shippers seem to follow the old adage, that “Doing something is better than doing nothing.” While the first choice continues to be meeting with suppliers to discuss performance improvement (57 per cent), there was a noticeable decline from last year in the number of respondents choosing to do nothing (12 per cent). An almost equal number would choose to either renegotiate (16 per cent) or cancel (14.5 per cent) the contract.
Read on to see more the results of our annual Canadian Shipper/Inside Logistics Outsourcing Survey and learn why and how shippers are outsourcing their logistics services as well as how they feel about the results.