Penske Logistics Presents 2024 3PL Study: Supply Chains Turn to Technology to Navigate Economic Volatility and Battle for Talent
READING, Pa., Oct 2, 2023 – The 28thAnnual Third-Party Logistics Study, created by supply chain professor and researcher Dr. C. John Langley of Penn State University, along with NTT DATA and Penske Logistics, examined how supply chains are navigating today’s challenges through the adoption of data-driven approaches and emerging technologies. The 2024 publication was presented at this year’s Council of Supply Chain Management Professionals (CSCMP) EDGE conference in Kissimmee, Florida.
The study surveyed third-party logistics (3PL) providers and users of 3PL services to understand the current state of 3PLs, how 3PL relationships are evolving, the increasing flow of data and the growing importance of automation.
This year’s report offers updated insights on navigating the talent crisis and economic volatility, the untapped potential of reverse logistics, the continued growth of the cold chain, the slowdown of online shopping and consumers’ shifting expectations.
The key findings are:
- 3PL-Shipper Relationships Continue to Strengthen: Shippers are more satisfied with their 3PLs in the most recent study. Shippers conveyed their positivity at a 95% response rate, up 12% from last year. However, there was an increase in the number of shippers that noted that they were either reducing or consolidating their 3PLs (78% this year vs. 71% last year).
- Battle for Talent is Increasing: 78% of shippers and 40% of 3PLs said labor challenges have impacted their service level agreements. The hardest positions to fill are for hourly workers, such as pickers and packers, and licensed hourly workers, such as truck drivers and equipment operators. 3PLs and shippers said they are adopting technology and automation to increase efficiency, make work safer and attract employees.
- Data, Analytics and Intelligence is Driving Supply Chain Optimization: The amount of data flowing between shippers and 3PLs continues to grow. Almost half of shippers and 3PLs identified the need and have plans toward automating supply chain planning decisions, and 25% of shippers and 27% of 3PLs said they have already started to automate low-risk decisions. Shippers see the greatest value in supply planning (65%), demand forecasting (61%) and inventory management (61%). 3PLs noted that they valued route optimization the most (61%), followed by inventory management (55%) and freight invoicing and billing (54%).
- Emerging Technology is Vital to Future Growth: It is agreed that emerging technology adoption is vital to the future growth of supply chains (87% of shippers and 94% of 3PLs). The top areas of interest are advanced predictive analytics, wearables and mobile technology, consolidated e-commerce platforms and warehouse automation and robotics.
- Improving Supply Chain Resiliency is a Priority for Shippers and 3PLs: Shippers and 3PLs are actively working to balance the need for resiliency with inventory levels, sourcing and cost. Information is aiding supply chains via data-driven decisions that allow for contingency planning and network optimization. Direct-to-consumer online sales have started to slow down, with shippers and logistics providers working to meet the ever-evolving needs of the consumer.
Dr. Langley’s research continues to capture and measure this evolving industry and document the transformation of the third-party logistics sector as new challenges and opportunities emerge. The 2024 study and past versions are available for download at www.3PLStudy.com.
“The 3PL sector continues to face a number of externalities, and providers of logistics services are focused on improving logistics effectiveness and reducing overall supply chain costs,” Dr. Langley said. “3PLs and their customers are leveraging their relationships along with technology, data, analytics and supply chain talent to increase agility and enhance success.”
“The 2024 3PL Study does an excellent job of untangling the complexities of today’s supply chain and providing nuanced understandings of its underpinnings,” shared Andy Moses, senior vice president, sales and solutions, Penske Logistics. “There are many needs that shippers have in the current environment and third-party logistics providers are in prime position to stabilize and adapt as needed.”
“Now in its 28th year, the 3PL Study continues to be a great benchmark of the supply chain trends as well as changes and emerging trends in the shipper & 3PL/4PL relationship,” added Irv Grossman, senior vice president, NTT DATA Supply Chain Consulting (formerly Chainalytics). “The insights shared throughout will help both providers and shippers be more effective in today’s supply chain environment.”
Penske Logistics is a Penske Transportation Solutions company headquartered in Reading, Pennsylvania. The company is a leading provider of innovative supply chain and logistics solutions. Penske offers solutions including dedicated transportation, distribution center management, lead logistics, freight management, transportation management, freight brokerage, and a comprehensive array of technologies to keep the world moving forward. Visit PenskeLogistics.com to learn more.