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3PL study highlights potential of blockchain and digitization in the supply chain


New York, NY — A global study of third-party logistics says 73 per cent of shippers indicated third-party logistics providers bring innovative, value-add services to improve logistics effectiveness

The findings are from the 2018 22nd Annual Third-Party Logistics (3PL) Study, which examines the global outsourced marketplace and leading trends for shippers and 3PLs in the logistics industry. The study is presented by Penske Logistics, Infosys Consulting, Penn State University, and Korn/Ferry.

This year’s study shows the continuation of two trends: the importance of the relationship between shippers and 3PLs, and the importance of adapting to emerging technologies, including blockchain and automation. The result of these closely-forged relationships is improved services to the end customer.

The specialized focus in this year’s report are blockchain, automation/ digitization, the logistics talent revolution required for shippers and 3PLs to drive technology advancements, as well as how shippers and 3PLs view their risk/resilience relationship.

Blockchain

This is the first time that the 3PL study investigates blockchain. Results show that while 30 per cent of 3PLs and 16 per cent of shippers see blockchain as a potential application, they have yet to engage with the technology. The study describes anticipated benefits including improved supply chain visibility and potential challenges that participants will face in implementing blockchain.

“Blockchain has the potential to make significant improvements in security, transparency and governance, but only in supply chains where there is value in controlling consumer risk, valuable goods or complying with regulations,” said Ken Toombs, Global Head of Infosys Consulting. “Shippers and 3PLs will need to work together to drive value from blockchain, using lessons collectively learned from missteps with other emerging technologies like Radio Frequency Identification (RFID).”

Automation/ Digitization in Transportation

The study describes some of the exciting potential with on-road automation, such as driverless vehicles. It also describes many ways in which automation is already providing returns across the supply chain through digitalized load matching and warehouse robotics. Competitiveness is a key driver for a majority of 3PLs (62 per cent) and shippers (57 per cent) to invest in automation/ digitization. However, the report also revealed a number of reasons for lack of investment in digitization and automation, including a lack of in-house talent to develop, implement and monitor (12 per cent of 3PLs and 10 per cent of shippers).

“Technology improvements in supply chain, especially in the area of fleet operations, have had positive impacts on the industry,” said Tom Scollard, Penske Logistics Vice President of Dedicated Contract Carriage. “It has allowed 3PLs to operate fleets that are safer and more efficient for the customer.”

Logistics Talent Revolution

Technology is reframing the demands on the workforce, particularly within the supply chain where automation, digitization and data collection capabilities are growing rapidly. Supply chain leaders and logistics executives play even more critical roles as companies work to build more efficient and technologically advanced supply chains.

“It’s no surprise that technology continues to unlock unforeseen value across the global supply chain in a variety of ways,” said Neil Collins, Regional Managing Partner for Korn Ferry’s North American Industrial Markets. “To leverage the potential upside, organizations must now rethink their talent strategy from top to bottom. The supply chain/logistics leader must now be agile, a strategist, a visionary and a collaborator. The entire supply chain organization must now compete with technology, and the winners will be those that elevate their people using technology, rather than replacing them with it.”

Risk/Resilience in Shipper-3PL Relationships

Through all the technological advances, the opportunity to improve upon the risk/ resilience relationship between 3PLs and shippers continues: 79 per cent of 3PLs and 64 per cent of shippers report they have been involved in projects in which the ability to execute quickly was directly impacted by lack of complete, accurate and consistent information provided by the shipper.

The study shows a large increase in the per centage of shippers seeking information technology (IT) services from 3PLs, with 27 per cent indicating outsourcing of IT services in the 2018 study compared to 17 per cent in the previous year. However, the per centage of shippers indicating satisfaction dropped slightly this year from 65 per cent to 56 per cent, potentially due to higher expectations among shippers as technology has improved or because shippers are seeking enhanced analytical capabilities to help drive more effective supply chain decisions.

The study report and additional materials are also presented on a dedicated website, www.3PLstudy.com