2022 Inbound Logistics Perspectives: 3PL Market Research Report
Our 17th annual 3PL market research report takes a deep-dish dive into the dynamics of logistics partnerships in 2022. Rampant inflation, including high transportation costs. A tight labor market. Commodities shortages. Uncertainties tied to the war in Ukraine and the pandemic. There seems to be no end to the obstacles ready to frustrate shippers as they work to serve their customers and make a profit. To clear those hurdles, shippers often form partnerships with third-party logistics (3PL) companies, outsourcing certain supply chain activities to experts with specialized resources. Inbound Logistics’ 17th annual 3PL Perspectives report shows that these partnerships constitute a popular strategy. A large majority of 3PLs in the survey tell us they have gained customers and seen revenues and profits climb in recent months. The 2022 3PL Perspectives report presents and analyzes data collected from 3PLs and shippers to describe how those partnerships work across a broad range of 3PL services. Once you’ve chewed on the results, have a look at the Top 100 3PLs for 2022 to learn more about the service providers that help shippers build efficient and effective supply chain operations, whatever obstacles they may face. About the 3PL Respondents ASSET-BASED OR NON-ASSET BASED GEOGRAPHIC COVERAGE 2021 REVENUE Participants in this survey report in excess of $150 billion in gross sales in 2021. Several did not report revenue so the total is likely higher. TOP CHALLENGES SHIPPERS FACE Although the transportation capacity crunch has eased somewhat since 2021, freight rates remain high. Combine that with the challenges of an overall inflationary market, and it’s obvious why shippers are under pressure to reduce expenses. Cutting transportation costs—not just finding lower rates, but controlling the overall costs involved in moving freight—is by far the biggest concern for shippers who responded to this year’s survey. Seventy percent named that as a crucial challenge, up from 50% in 2021. The second most pressing challenge is finding, training, and retaining qualified labor in a tight market, cited by 55% of respondents. But the challenge that saw the biggest jump since 2021 was business process improvement. Last year, 37% of shippers named that as an important challenge, while in 2022, the number is 51%. Another issue that has moved up the list of shipper concerns is improving customer service, cited by 38% of shippers in 2022, compared with 28% in 2021. And while only 14% of shippers say they face challenges in the area of corporate social responsibility, including sustainability, that is 10 points higher than the 4% who pointed to that issue in 2021. TOP CHALLENGES 3PLS FACE Despite recent reports that it’s easier to find space on a truck or ocean vessel these days, capacity remains the top challenge for 3PLs in 2022, cited by 80% of those who responded to the survey. And even more so than shippers, 3PLs struggle with finding, training, and retaining qualified labor. This year, 70% of 3PLs named that as an important challenge. But when it comes to finding and retaining customers, the picture has improved a great deal for 3PLs since 2021, when 74% of respondents named this as a challenge. This year the number is just 23%. Also, far fewer 3PLs are struggling with growth management: 29% in 2022, down from 78% in 2021. While capacity and talent are the issues most likely to challenge 3PLs, two others stand out because of how much they have climbed the list of top challenges since last year. In 2021, only 10% of 3PLs named rising operational costs and access to capital as an important challenge. This year, 63% are concerned about how to fund their operations. And while just 10% of 3PLs cited technology investment in 2021, over the past year that has become a concern for 46% of respondents. Given all the other challenges they and shippers grapple with today, it stands to reason that more 3PLs are looking to implement technology to make operations more efficient and support smarter supply chain strategies. SPECIAL SERVICES 3PLs OFFER Obviously, shippers outsource basic logistics activities to 3PLs. They rely on these partners to plan and execute freight moves, find capacity at competitive rates, store inventory, fill orders, and carry out other basic functions. Beyond that, many 3PLs differentiate themselves by offering more specialized services. The most common among them is logistics and transportation consulting. In 2022, 78% of 3PLs in the survey said they offer services to help shippers develop effective strategies—for example, determining where to hold inventory or what combination of transportation […]
