Study finds COVID deepening the relationship between shippers and 3PLs

2:07am 6th November 2020

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The Third-Party Logistics Study finds that pandemic is driving re-evaluation of supply chains and the relationships within them

The new study from Penske has found that shippers and their 3PLs are moving closer to a strategic relationship and further away from a transactional one, driven by the pressures of COVID-19. 

Companies in the survey reported enormous pressures in this year, with 58% of companies experiencing at least a 25% reduction in supply chain operations and 6% seeing a total shutdown due to COVID-19. For shippers, the two biggest shipper areas of disruption were transportation/logistics (55%) and manufacturing (46%). For 3PLs, the largest problem areas were labour/workforce management (54%) and domestic transportation/logistics (45%).

This is pushing many shippers and 3PLs to drive new relationships to become more robust. Ninety-two percent of 3PL users and 96% of 3PL providers agree that supply chains are evolving into complex networks. Across the next five years, shippers predicted that strategic relationships with their 3PLs would increase to 45% (from the current 28%).

Study respondents indicated that 71% of shippers and 83% of 3PLs are on the same page towards identifying changes in macro-environments and to modify and enhance supply chain capabilities.

The survey also showed that more focus on technology will create a more robust supply chain. The majority of shippers indicated they are utilising technology to improve planning through applying it to supply (89%), demand (83%), sales/operations (78%) and capacity (61%) considerations.

Third-party logistics providers are further along in mobile technology, with increased usage of smartphones, tablets, wearables and other handheld devices. The majority of shippers are using dashboards and related tools in their operations for real-time access, while 48% noted they have systems in place to organise and access that data for reporting purposes, and 45% stated they collect real-time data across more than half of their supply chains.

Risk management also became extra important during the pandemic. Among respondents, 51% of shippers were confident their companies possess a comprehensive risk management process. Additionally, 45% of shippers stated that their risk management coverage extended into multiple layers of suppliers downstream and upstream. Over a third of shippers (37%) forecasted that future supply chains would rely less on global capabilities and more on domestic or local capabilities; 49% of 3PLs answered this way as well. 

When asked if supply chains are too lean, 42% of shippers agreed while 49% disagreed with the notion. While globalization is an industry mainstay, recent occurrences have sparked talk of further nearshoring in order to retain a dynamic and responsive supply chain.

"Visibility is increasingly vital in the supply chain, but even more so when there is a risk of disruption or during a recovery," said Andy Moses, Senior Vice President of sales and solutions for Penske Logistics. "Visibility allows those within the supply chain to get ahead of an interruption, potentially mitigating problems before they have an impact on customers or other stakeholders in the supply chain. Properly orchestrated and tech enabled, visibility sets the stage for a rapid response by alerting supply chain execution teams to focus on the issues of greatest importance, out of the thousands and millions of ordinary transactions occurring."


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