Third-Party Logistics Provider Analysis

2/3 of domestic U.S. Fortune 500 companies now use third party logistics companies to assist and manage their logistics and supply chain functions in some capacity according to a Nov 2006 study performed by Armstrong & Associates.

Armstrong which maintains an extensive database of 2,864 3PL customer relationships develops an annual report to provide insight into trends and changes in the 3PL, logistics outsourcing industry.

Another trend is large companies utilizing multiple 3PL providers to manage their supply chain. General Motors, Wal-Mart, DaimlerChrysler, and Ford Motor each use 30 or more logistics providers, which shows that larger companies are utilizing the services of many 3PLs rather than specifically using one global provider.

Armstrong estimates that the Fortune 500 3PL market was worth $158.1 billion in 2005.

The 3 primary logistics services outsourced in 05 include:

1. Transportation Management at 20.5%
2. Warehousing at 19.3%
3. Value-Added Services at 18.5%

Source: Third Party Logistics Customer Report 2006

Warehousing in the Future

When I started working in the logistics industry I had the great opportunity of attending an education seminar taught by Ken Ackerman, a respected logistics consultant and one of the premier writers and thinkers in the warehousing and logistics industry.

I was just looking through some old articles the other day and came across a great interview with Ken that delves into how to got into logistics consulting and how he saw the warehousing and logistics industry changing in the future.

In an article he wrote with George Gecowets, the retired head of the Council of Supply Chain Management Professionals, Ken identified:

8 Developments That Will Change Warehousing in the Coming Years.

1. A greater emphasis on systems and flow in measuring performance
2. Greater use of artificial intelligence
3. Branding in the supply chain
4. Simplified released-rate pricing to eliminate liability hassles
5. More paperless and almost laborless operations
6. More emphasis on worker education and training
7. Consolidation to two types of freight carriers, linehaul and last mile
8. Federal involvement in rebuilding the transportation infrastructure

Here is the full interview
http://www.warehousing-forum.com/dc_velocity.html