Ongoing disruption, strategic misalignments and labor challenges are straining 3PL-shipper relationships
Amidst the growing uncertainty of today’s global supply chain, the 2023 Annual Third-Party Logistics Study was released today, giving insight into the challenges and opportunities facing suppliers and third-party logistics providers (3PLs). The publication, created in conjunction with NTT DATA, supply chain professor and researcher Dr. C. John Langley and Penske Logistics, examines back-to-basics principles for supply chain professionals, the ongoing talent crisis and the rise of reverse logistics.
Key findings include:
- Getting Back-to-Basics: While innovative technologies, globalization and growing access to data have all helped transform the supply chain, they have also created complexity, disconnects and competing priorities. A return to the fundamental principles governing supply chains is underway. “The Seven Immutable Laws for Supply Chain Success,” helps organizations shift back-to-basics by focusing on the core principles needed to achieve current and future supply chain success. Of these principles, both shippers and 3PLs rated data and analytics, customer focus, and innovation and transformation, as the most important in achieving future improvement in their organization’s supply chains.
- Understanding the Talent Crisis: The supply chain industry has been hit hard by labor shortages, with 78% of shippers, and 56% of 3PLs, reported that labor shortages have impacted their supply chain operations. Hourly workers (e.g., pickers and packers) and licensed hourly workers (e.g., truck drivers and equipment operators) continue to be the hardest roles for companies to hire and retain. Many see the talent shortage as a long-term issue, with 27% of shippers, and 29% of 3PLs, reporting they believe there has been a permanent shift.
- Tapping into the Potential of Reverse Logistics: Often neglected as the back half of the supply chain equation, reverse logistics has since become an integral part of both the B2B and B2C buyer experience. Consumer-focused shippers rated the returns experience as being extremely important (75%) to consumer loyalty, and both consumer-focused shippers (65%) and business-focused shippers (60%) noted that return expectations are growing. As buying habits continue to shift reverse logistics represents a key opportunity to boost efficiency and improve consumer satisfaction.
- ESG Surges: Corporate Environmental, Social and Governance (ESG) continues to be a top priority for today’s supply chain. However, only 22% of shippers and 17% of 3PLs rated themselves as a trailblazer and a leader in ESG. Conversely, 45% of shippers and 41% of 3PLs rated themselves as average in their ESG targets. This discrepancy suggests that both shippers and 3PLs may be misaligned in implementing their ESG efforts.
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Langley stated: “The Annual Third-Party Logistics Study identifies and provides insight into key issues and challenges facing 3PLs and shippers. Although these organizations are all dealing with unprecedented change and volatility in the global marketplace, they continue to improve and create value for their end-user customers and consumers. Hopefully, this year’s study topics and results inspire further efforts to improve our supply chains via the benefits of successful 3PL-customer relationships.”
Andy Moses, senior vice president sales and solutions, Penske Logistics: “This year’s study findings present a robust view of the challenges and opportunities shippers and logistics providers are facing in rebalancing the supply chain. Attracting and retaining talent in the supply chain remains of central importance to shippers and logistics providers. There are talent needs industrywide from airline pilots, ship captains, truck drivers, and warehouse workers to engineers and technology professionals. People remain central to an efficient and functional supply chain to meet society’s needs.”
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Sylvie Thompson, vice president, consumer brands, retail, and distribution practice leader, NTT DATA Services: “I believe we are facing a talent pool crisis and until we can attract new talent into the profession—at all ages and levels—our ‘talent crisis’ will continue. Further, we are all aware of the lack of women in senior levels within supply chains, but diversity is more than gender. Our talent pool is not representative of the communities we work in nor where our teams live. We need to not only expand our pool from a numbers perspective but also from a diversity perceptive.”
