The logistics industry is “facing an unprecedented labor shortage” for which 79 percent of 3PLs are unprepared, according to a new study from Penske Logistics.
A new report on the third party logistics industry finds tightening capacity, innovations, mergers and acquisitions are altering competition, service offerings and shipper-3PL relationships.
The annual study from Capgemini Consulting, Penn State University, Korn Ferry, and Penske Logistics found tightened capacity, along with increased consolidation within logistics service providers has resulted in fewer partners for 3PLs and increased prices.
As a result, 44 percent of survey respondents reported that they have enhanced relationships to guarantee shipping lanes and on-time shipments and 40 percent have increased rates. Among shippers, 29 percent said assets have not been available to move shipments when needed. Similarly, 29 percent have engaged with a larger number of 3PLs to get access to capacity.
“The spirit of collaboration with 3PLs and shippers has led to increased efficiencies in the supply chain,” said Bob Daymon, vice president of transportation management for Penske Logistics. “Enhanced relationships with shippers results in operational costs savings and ensures reliable coverage and better rates.”
In order to differentiate themselves, 3PLs are working to provide sustained value, innovative solutions and information to facilitate data-driven decisions, according to the study. 3PLs are also using technology and data to aid shippers in selecting the right shipment modes to maximize efficiency and reduce costs.
Among respondents, 60 percent are using technology to increase visibility within orders, shipments and inventory; 40 percent are using technology for planning within transportation management; and 48 percent are using it for scheduling within transportation management.
“As the logistics landscape continues to respond to more freight, capacity and regulatory issues, as well as increasingly demanding customers and consumers, the industry is more focused than ever on innovation,” said the release. “To meet increasing customer requirements, 58 percent of respondents said they are investing in new capabilities for themselves, 40 percent said they are leveraging new capabilities from other companies in different industries, and 15 percent said they are leveraging new capabilities from competitors.”
According to the study, the logistics industry is also facing an unprecedented labor shortage, and the majority of 3PLs (79 percent) said they are unprepared for the labor shortage’s impact on their supply chain.
However, more than half of shippers (53 percent) feel they can rely on their 3PLs to address the labor shortage’s effect on their business. To meet demand, 3PLs will need to leverage their employees in new ways and re-think their strategy for attracting and retaining employees.
“Wage issues and job alternatives that didn’t exist a few years ago have increased competition for talent. For many companies, this means a fundamental shift in how they recruit today’s workforce for tomorrow’s needs,” said Neil Collins, global leader of logistics, distribution and transportation for Korn Ferry. “A strong work culture and stand-out training will be key, while creating opportunities to work across departments or regions will help employers attract and develop an agile, adaptable workforce.”
Report: Tight capacity, M&A means fewer partners for 3PLs, increased prices
