Shippers urge third-party providers to offer innovation; 3PLs say they're capable but need to get closer to the source.
To hear shippers tell it, third-party logistics service providers (3PLs) need to come to the table with fresh and innovative ideas they could proactively implement to improve service levels, response times, and overall efficiencies.
To hear third-party logistics providers tell it, shippers need to open their upstream organizational channels so 3PLs can glean the strategic intelligence they need to proactively implement fresh and innovative ideas.
It's the logistics world's version of "cognitive dissonance." And while it hasn't kept freight from moving, it has become a source of frustration on both sides.
In the 2010 edition of the annual "Third Party Logistics Study" by the noted academic C. John Langley Jr. with Capgemini Consulting, the Swiss 3PL Panalpina, and the U.K. publication eyefortransport, only 68 percent of shippers surveyed said their 3PL partners were delivering "new and innovative ways" to improve logistics effectiveness. By contrast, 95 percent of 3PLs said they were bringing new ideas to the shipper relationship. Despite the apparent disconnect, nearly 90 percent of shippers said they were generally happy with their 3PL relationships.
Two years later, some shippers say little has changed. Speaking on a panel earlier this month at the Georgia Logistics Summit in Atlanta, Mark Holifield, The Home Depot Inc.'s senior vice president, global supply chain, declared that 3PLs "need to rise to the challenge to bring real value and solutions" to shippers.
Holifield is not alone in that assessment. An executive of a large consumer products manufacturer, who asked not to be identified, said at the conference, "we're looking to 3PLs to bring new ideas to the relationship. But innovation has been lacking from the 3PL space."
Both executives said they take pains to bring their 3PLs into the strategic loop. The consumer products executive said the company's senior management meets regularly with high-level 3PL counterparts and provides a 23-point checklist that outlines its strategy for its 3PL partners. Holifield said Home Depot annually holds two-day meetings with its leading 3PL partners to discuss strategy and execution.