2010 was another year in which critical lessons were learned. It is crucial for 3PLs to pursue a successful combination of value-added solutions to remain competitive and sustain growth. The main challenges facing 3PL providers this year will be meeting customers’ logistics cost demands, paired with the ability to address increased flexibility because of the impact of a globally erratic business environment.
We see three key success factors defining a good, solid relationship between 3PLs and shippers: First, 3PLs provide open, transparent and strong communications that strengthen their relationships with shippers. Second, 3PLs offer flexibility to accommodate specific customer challenges. Third, the combination of these benefits allow for a strong collaboration with gain sharing between 3PL and shippers.
A resounding theme in our industry is the current economic volatility. 3PLs will most likely face numerous pricing challenges associated with highly volatile freight pricing, including the unpredictable challenges those demands will have on the efficiency of customers’ supply chains.
The proven approach for continued success in the 3PL market includes a strong focus on shippers’ key needs by becoming more involved in logistics planning and customer forecasting. Shippers should expand outsourcing relationships from purely operational and repetitive activities to strategic and IT intensive services.
Such collaborative relationships are built on transparency and trust. Together, shippers and 3PLs should position target metrics such as landed cost, inventory reduction, cycle times, order rate and accuracy to measure the augmented benefits from using 3PL services.