More than ever, our customers are asking third-party logistics providers to partner with them to address the challenges of managing a global supply chain when the elements affecting supply chains seem to shift significantly on an almost monthly basis.
The major shift we see from the marketplace is a reconsideration of where materials and manufacturing may be most effectively sourced. Shippers and consignees are seeking ways to shorten the length and the complexity of their supply chains to lessen the potential impact of this increased variability and volatility.
Variability in capacity, transit times, pricing and other elements make midterm planning and budgeting difficult. Because the inability to predict many of the changes in these critical areas is expected to continue, shippers are looking for 3PL capabilities that are more nimble, innovative and controllable from origin to destination.
Simultaneously, the shipper and consignee’s determination to reduce inventories and safety stock and to improve total landed cost require predictable transit times and costs.
Those goals tend to run in direct contrast with current market forces, however. The 3PL is called upon to provide the solutions allowing these seemingly conflicting elements to co-exist. It is these changing variables and the customer’s determination to maintain some level of predictability and control that is driving 3PL behavior, investment and organizational restructuring.
It will be the challenge that will separate the more proactive and flexible 3PLs from the more traditional providers.