Insights

2020 Third-Party Logistics Study – The State of Logistics Outsourcing

The 2020 24th Annual Third-Party Logistics Study shows that shippers and their third-party logistics (3PL) providers continue to enhance their relationships and work together to accomplish supply chain goals and objectives. Both parties seem to focus on doing what it takes to achieve supply chain success and to meet their business objectives. As suggested throughout the content of this report, the availability of data and the utilization of appropriate technologies are responsible for much of the improvement that is taking place.

The study shows that the vast majority of shippers—93%—report that the relationships they have with their 3PLs generally have been successful. A higher number—99%—of 3PLs agree that their customer relationships generally have been successful. Among respondents of the 2020 study, 83% of shippers and 98% of 3PL providers agree that the use of 3PLs has contributed to improving services to the ultimate customers. Additionally, 66% of 3PL users and 93% of 3PL providers agree that 3PLs provide new and innovative ways to improve logistics effectiveness.

Shippers are increasingly aware that if they do not have the technological capabilities to accomplish their goals, they should partner with those that do. As the amount of available data increases, shippers and their logistics partners will need to be able to take the available information and make it relevant. Many 3PLs are already making significant investments in technology that allow them to analyze shippers’ operations. The majority of shippers—94%—agree that IT capabilities are a necessary element of 3PL expertise, and 56% of shippers agree they are satisfied with 3PL IT capabilities.

Again this year, there has been a continuation of the most frequently outsourced activities, which tend to be those that are more transactional, operational and repetitive. The most prevalent activities shippers outsource are domestic transportation (73%), warehousing (73%), international transportation (65%), customs brokerage (54%), and freight forwarding (52%).

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