Report: Forget the Last Mile, 3PLs Need to Focus on Last-Yard DeliveryPosted on October 10, 2018
A quick—OK, not so quick—read of the 2019 22nd Annual Third-Party Logistics Study reveals, as we reported here, that the use of 3PL firms is growing. So, while not every parcel shipper has turned to an intermediary for help yet, the odds are that they will.
The study, which was released by Infosys Consulting, Penn State University, Penske Logistics, and Korn Ferry during the recent Council of Supply Chain Management Professionals (CSCMP) Edge conference in Nashville, Tenn., shows an increase in the use of 3PLs as 63 percent of shippers said they would outsource more of their logistics operations in 2018, compared to 61 percent in 2017. And among the 3PL companies that responded to the survey, 86 percent said their customers were keeping them busier, up from 83 percent the prior year.
3PL as IT Support
One of the most interesting findings of the study was the reliance of shippers on 3PLs for IT help.
More than 90 percent of shippers that responded said, "IT capabilities are a necessary element of 3PL expertise." But satisfaction of that expertise is lagging behind the need, as only 55 percent of shippers said they were satisfied with the IT capabilities of 3PLs.
Going the Extra Yard
Perhaps signifying the need to meet customers’ increased delivery expectations, the report brings last-mile even closer to the customer, something it refers to as “last-yard.” But whether last-mile or last-yard, shippers and 3PLS see the need for the attention paid to providing quality service directly to the door. In fact, 72 percent of both shippers and 71 percent of 3PLs said both sides of the relationship "recognize the need for capable, last-yard logistics services."
While both shippers and 3PLs saw eye-to-eye on the need for last-yard, when it came to managing it, there seemed to be a bit of a disconnect between the two groups.
When asked if "they effectively manage(d) last-yard logistics needs," a little more than half of the shippers responded yes. But, the 3PLs that were surveyed didn’t quite see the shippers as being as effective. Only 34 percent of the 3PL respondents believe their customers managed those needs "effectively." This disconnect may be from a lack of awareness or perhaps just an indication of a rapidly changing market for last-yard delivery that 3PLs may be a bit more in-tune with and ready for both procedurally and through technological awareness.
This combination of need for technological help and need—even if unknown—of finding better and more agile ways to manage the last-mile, let alone the last-yard logistics, could be the recipe for the 3PL industry to continue the growth trend as they find ways to help shippers in a variety of industries with their parcel deliveries.
Want more proof? 42 percent of shippers have not made changes to improve their agility over the last five years, but 51 percent say they are open to new ideas to create more opportunities for 3PLs to introduce and implement innovations. Stay tuned for an upcoming Pierbridge white paper on what 3PLs can do to provide more value to shippers in terms of technology and services.