{"49781":{"#nid":"49781","#data":{"type":"news","title":"3PL Study Examines Global Market for Shippers and Logistics Providers","body":[{"value":"\u003Cp\u003EGeorgia Institute of Technology, in corporation with Capgemini, Oracle, and logistics provider, Panalpina, recently released an in-depth study examining the current global market for logistics outsourcing.\u003C\/p\u003E\n\u003Cp\u003EBased on responses from both shippers and logistics service providers in North America, Europe, Asia Pacific and Latin America, the Fourteenth Annual Third-Party Logistics (3PL) study explores some of the key issues affecting the industry. Key findings include:\n\u003C\/p\u003E\n\u003Cp\u003E*  The economic downturn has created significant challenges for both shippers and third-party logistics providers (3PLs) - 82 percent of shippers are employing cost-cutting tactics and 60 percent are rethinking their supply chains and relationships with 3PLs as a result\n\u003C\/p\u003E\n\u003Cp\u003E*  88 percent of shippers feel that IT-based logistics services are important, but only 42 percent are satisfied with the capabilities of their provider - as a result of this IT capability gap, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain and 3PLs reported similar difficulties in getting the data and commitment they need from shippers\n\u003C\/p\u003E\n\u003Cp\u003E*  There are significant differences between how 3PLs evaluate their role in the supply chain and how they are viewed by shippers - only 59 percent of shippers feel their use of 3PLs has a positive effect on customer service compared to 88 percent of 3PL respondents\n\u003C\/p\u003E\n\u003Cp\u003EShipper respondents devote an average of between 47 percent (in North America) and 66 percent (in Europe) of their total logistics expenditures to outsourcing and this is expected to increase in the next five years. \u003C\/p\u003E\n\u003Cp\u003E\u003Cem\u003E\u0022Shipper-3PL relationships are being impacted significantly by the prevailing uncertainty and economic volatility in global markets,\u0022 said Dr. C. John Langley Jr., Professor of Supply Chain Management, Georgia Institute of Technology.  \u0022It is very important for 3PLs to mitigate or reduce any financial risk or service level impact that this may cause.\u0022\u003C\/em\u003E\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EEconomic uncertainty and the use of 3PLs\u003C\/strong\u003E\u003Cbr \/\u003E\nEconomic volatility has challenged shippers and 3PLs alike to contend with factors such as unpredictable demand, instability in fuel costs and currency valuation, and excess inventory. In response, not only are shippers attempting to cut costs, they are also seeking to improve forecasting and inventory management (77 percent). \n\u003C\/p\u003E\n\u003Cp\u003ECost reduction and improved reliability in services are the main factors likely to increase shipper respondents\u0027 use of 3PLs. This includes converting fixed to variable costs (59 percent), expanding to new markets or offering new products (56 percent), and restructuring the supply chain network to improve financial performance (48 percent).\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cem\u003E\u0022Companies worldwide are still dealing with the effects of the economic downturn,\u0022 said Jim Morton, Senior Manager within Capgemini Consulting\u0027s Supply Chain practice. \u0022But shippers should embrace the opportunity to rethink their supply chains and the role that 3PLs can play in helping to attain business goals.\u0022\u003C\/em\u003E\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003ESupply chain orchestration\u003C\/strong\u003E\u003Cbr \/\u003E\nThe study shows that while shippers continue to outsource logistics services that are more operational and repetitive, they outsource less frequently those that are more strategic, customer facing and IT intensive. However, economic volatility presents an opportunity for shippers to assess their supply chains and make changes designed to increase agility and responsiveness, reduce costs and reconsider their relationships with 3PLs to drive them deeper. Overall, 75 percent of shipper respondents agree that more strategic 3PL relationships would help them reduce costs.\n\u003C\/p\u003E\n\u003Cp\u003EIn order to achieve a more strategic shipper-3PL relationship, shippers want to see 3PLs investing in enhancing their regional and vertical expertise to better understand their particular business. Shipper respondents will also need to be more forthcoming with their data and be willing to team with 3PLs to re-engineer business processes. \n\u003C\/p\u003E\n\u003Cp\u003E\u003Cem\u003E\u0022As a provider of outsourced logistics services, we know that openness, transparency and good communication, flexibility and the ability to achieve cost and service objectives are key to the success of our customer relationships,\u0022 said Kai Peters, Head of Supply Chain Development, Panalpina. \u0022But in order to be an effective partner for our customers, it is also increasingly important for us to understand the entire business, not just logistics.\u0022\u003C\/em\u003E\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EThe IT capability gap\u003C\/strong\u003E\u003Cbr \/\u003E\nIT is viewed as central to the overall performance of 3PL-customer relationships. However, lack of IT integration within 3PLs leads the list of shipper respondent issues (55 percent) with 3PL IT capabilities. Shippers and 3PLs seek IT that is responsive, delivers valued information such as order, shipment and inventory.\n\u003C\/p\u003E\n\u003Cp\u003EVisibility, builds on existing investments and allows for innovation. However, widespread use of manual practices and variations in standards make it difficult for shippers and 3PLs to exchange data reliably and connect workflows. Real-time interfaces to shipper order management systems (63 percent) and timely demand forecasts (54 percent) are the most desired IT capabilities 3PLs need from shippers.\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cem\u003E\u0022When shippers outsource logistics functions to a 3PL, IT is an essential part of the relationship,\u0022 said Jon Chorley, Vice President, SCM Product Strategy, Oracle. \u00223PLs and shippers need to leverage integrated IT platforms that deliver visibility across the entire logistics network in order to keep productivity and customer service levels high.\u0022\u003C\/em\u003E \n\u003C\/p\u003E\n\u003Cp\u003EOther problems cited by shippers with 3PL services include a lack of continuous, ongoing improvements and achievements in service offerings and unrealized service level commitments (both 46 percent).\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003E3PLs\u0027 role in logistics success\u003C\/strong\u003E\u003Cbr \/\u003E\nInterestingly, while there is significant agreement between shippers and 3PLs on critical issues, 3PLs generally have a more positive view of relationship success than shippers and have lower awareness about potential problems. This suggests that 3PLs still have some way to go before they fully meet the expectations of their customers. For example, 82 percent of 3PLs believe they provide new and innovative ways to improve logistics effectiveness, compared with only 50 percent of shipper respondents who feel they receive services of this nature. Similarly, only 54 percent of shippers reported improvements in service levels compared with 71 percent of 3PLs.\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EAbout the 2009 Third Party Logistics Study\u003C\/strong\u003E\u003Cbr \/\u003E\nOver 1,000 logistics executives from both 3PL users and providers in North America, Europe, Asia Pacific and Latin America participated in the web-based survey. A small number of executives in other areas such as South America and the Middle East also responded although there was no in-depth analysis of these geographies. This was the first year that 3PLs, in addition to shippers, were invited to share their views. The findings were then supplemented with the results from in-depth \u0027focus interviews.\u0027 Interviews were conducted with industry observers and experts, primarily relating to the special topics identified in this year\u0027s report. The Capgemini Accelerated Solutions Environment** (ASE) was also leveraged as a brainstorming setting where participants could collaborate on shared issues. \n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EAbout the Georgia Institute of Technology \u003C\/strong\u003E\u003Cbr \/\u003E\nThe Georgia Institute of Technology, located in Atlanta, is a leader in logistics and supply chain and logistics education. Through its Stewart School of Industrial and Systems Engineering (ISyE) and the Supply Chain and Logistics Institute (SCL), Georgia Tech is committed to serving logistics educational needs through its degree programs and its comprehensive professional education program. Georgia Tech also conducts a fully accredited Executive Masters in International Logistics (EMIL) program, a Supply Chain Executive Forum and a Leaders in Logistics Research Program. Global involvement is facilitated through The Logistics Institute Asia Pacific, a program in partnership with the National University of Singapore.\u003Cbr \/\u003E\nFor more information, please visit \u003Ca href=\u0022http:\/\/www.isye.gatech.edu\u0022\u003Ewww.isye.gatech.edu\u003C\/a\u003E and \u003Ca href=\u0022http:\/\/www.scl.gatech.edu\u0022\u003Ewww.scl.gatech.edu\u003C\/a\u003E.\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EAbout Capgemini \u003C\/strong\u003E\u003Cbr \/\u003E\nCapgemini, one of the world\u0027s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business Experience. The Group relies on its global delivery model called Rightshore, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2008 global revenues of EUR 8.7 billion and employs 90,000 people worldwide. More information is available at \u003Ca href=\u0022http:\/\/www.capgemini.com\u0022\u003Ewww.capgemini.com\u003C\/a\u003E.\n\u003C\/p\u003E\n\u003Cp\u003ECapgemini Consulting is the strategy and transformation consulting division of the Capgemini Group, with a team of over 4,000 consultants worldwide. Leveraging its deep sector and business expertise, Capgemini Consulting advises and supports organizations in transforming their business, from strategy through to execution. Working side by side with its clients, Capgemini Consulting crafts innovative strategies and transformation roadmaps to deliver sustainable performance improvement.  More information is available at \u003Ca href=\u0022http:\/\/www.capgemini.com\/consulting\u0022\u003Ewww.capgemini.com\/consulting\u003C\/a\u003E.  \n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EAbout Oracle\u003C\/strong\u003E\u003Cbr \/\u003E\nOracle is the world\u0027s largest business software company. For more information about Oracle, please visit our Web site at \u003Ca href=\u0022http:\/\/www.oracle.com\u0022 title=\u0022http:\/\/www.oracle.com\u0022\u003Ehttp:\/\/www.oracle.com\u003C\/a\u003E.\n\u003C\/p\u003E\n\u003Cp\u003E\u003Cstrong\u003EAbout Panalpina\u003C\/strong\u003E\u003Cbr \/\u003E\nThe Panalpina Group is one of the world\u0027s leading suppliers of forwarding and logistics services, specializing in end-to-end supply chain management solutions and intercontinental air freight and ocean freight shipments. Thanks to its in-depth industry know-how and state-of the-art IT systems, Panalpina provides globally integrated door-to-door forwarding services tailored to its customers\u0027 individual needs. The Panalpina Group operates a closeknit network with some 500 branches in over 80 countries. In a further 80 countries, it cooperates closely with partner companies. Panalpina employs about 14,000 people worldwide. For more information please visit \u003Ca href=\u0022http:\/\/www.panalpina.com\u0022\u003Ewww.panalpina.com\u003C\/a\u003E.\n\u003C\/p\u003E\n\u003Cp\u003E\u0026nbsp;\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"\u003Cp\u003EThe Fourteenth Annual Third-Party Logistics Study from Georgia Tech, Capgemini, Oracle, and Panalpina examines global market for shippers and logistics providers.\u003C\/p\u003E","format":"limited_html"}],"field_summary_sentence":[{"value":"3PL Study Examines Global Market for Shippers and Logistics Providers"}],"uid":"27279","created_gmt":"2009-10-27 00:00:00","changed_gmt":"2016-10-08 03:03:59","author":"Barbara Christopher","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2009-10-27T00:00:00-04:00","iso_date":"2009-10-27T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"49782":{"id":"49782","type":"image","title":"2009 Third-Party Logistics Study","body":null,"created":"1449175373","gmt_created":"2015-12-03 20:42:53","changed":"1475894453","gmt_changed":"2016-10-08 02:40:53","alt":"2009 Third-Party Logistics Study","file":{"fid":"127044","name":"tjv50728.jpg","image_path":"\/sites\/default\/files\/images\/tjv50728_0.jpg","image_full_path":"http:\/\/www.tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/tjv50728_0.jpg","mime":"image\/jpeg","size":44312,"path_740":"http:\/\/www.tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/tjv50728_0.jpg?itok=We8bsTQs"}},"49783":{"id":"49783","type":"image","title":"Dr. C. John Langley Jr","body":null,"created":"1449175373","gmt_created":"2015-12-03 20:42:53","changed":"1475894453","gmt_changed":"2016-10-08 02:40:53","alt":"Dr. C. John Langley Jr","file":{"fid":"127043","name":"tct50277.jpg","image_path":"\/sites\/default\/files\/images\/tct50277_0.jpg","image_full_path":"http:\/\/www.tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/tct50277_0.jpg","mime":"image\/jpeg","size":62857,"path_740":"http:\/\/www.tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/tct50277_0.jpg?itok=jkAf3Vp5"}}},"media_ids":["49782","49783"],"groups":[{"id":"1242","name":"School of Industrial and Systems Engineering (ISYE)"}],"categories":[{"id":"129","name":"Institute and Campus"},{"id":"131","name":"Economic Development and Policy"}],"keywords":[{"id":"7884","name":"3PL"},{"id":"7885","name":"capgemini"},{"id":"109","name":"Georgia Tech"},{"id":"7886","name":"global markets"},{"id":"7888","name":"logistics providers"},{"id":"167077","name":"scl"},{"id":"170924","name":"shippers"}],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003E\u003Cstrong\u003EBarbara Christopher\u003C\/strong\u003E\u003Cbr \/\u003EIndustrial and Systems Engineering\u003Cbr \/\u003E\u003Ca href=\u0022http:\/\/www.gatech.edu\/contact\/index.html?id=bt3\u0022\u003EContact Barbara Christopher\u003C\/a\u003E\u003Cbr \/\u003E\u003Cstrong\u003E404.385.3102\u003C\/strong\u003E\u003C\/p\u003E","format":"limited_html"}],"email":["bchristopher@isye.gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}