An annual third party logistics (3PL) survey compiled by Capgemini Consulting, Penn State University, and Penske Logistics found that the use of “big data” will only continue to become more critical to supply chain operations now and in the future, while at the same time shippers are becoming more “mode neutral” as they prepare for a trucking capacity shortage that’s expected to materialize soon.
Authored by Penn State Professor C. John Langley and unveiled at the annual meeting of the Council of Supply Chain Management Professionals (CSCMP) this week in Kissimmee, FL, the 21st Annual Third-Party Logistics Study found that nearly all of the 3PLs – some 98% – in the survey said improved data-driven decision-making is “essential to the future success of supply chain activities and processes,” with 93% of shippers polled agreeing with that perspective.
Both groups—86% of 3PLs and 81% of shippers—said the effective use of big data will become “a core competency of their supply chain organizations,” the study found.
Logistics providers are also getting more “operational and tactical” with how they use supply chain insights gleaned from data analysis.
Among 3PLs, 71% said the greatest value data provides is in “improving process quality and performance,” with 70% saying “improving logistics optimization” matters most and 53% pointing to “improving integration across the supply chain” as the key benefit.
“Data-driven decision-making is certainly an increasing trend in the supply chain,” noted Tom McKenna, senior vice president of engineering and technology for Penske Logistics, in a statement.
“Among the biggest challenges that come with increased visibility and more data is determining how to best use that information to drive improvements that benefit the customer,” he added.
Shippers on the other hand are increasingly interested in seeing “big data” being used to create “a competitive advantage” for logistics providers, in terms of the ability of providers to use technology and expertise to gather and analyze information.
Shippers highlighted several key areas where big data could boost logistics performance:
- 60% said improving integration across the supply chain
- 55% pointed to improving data quality
- 52% cited improving process quality and performance
Yet the study also determined that there “appears to be a slight disconnect” between logistics providers and their understanding of big data’s importance to shippers.
For example, among shippers participating in this annual poll, 79% said their supply chain organization sees significant value in the use of big data compared with 65% of 3PLs who reported that their customers see such "significance."
Yet shippers and 3PLs both stress that better use of big data will be critical in helping overcome several growing challenges – especially an expected tightening of trucking capacity.
“Fluctuating capacity, increased shipper demands and disruptions within the industry are creating a volatile decision-making environment for shippers and logistics providers trying to optimize the supply chain,” the study noted. “Both parties are increasingly using information and analytics to drive their decisions.”
Shippers are also becoming “less concerned” about the mode of transportation used to move their goods and instead are opting for the “most efficient means” of moving products, the survey found.
That has resulted in the growth of so-called “mode-neutral” logistics providers, with 3PLs using data aggregation and analysis to determine the best shipment methods.
Indeed, more than half of the 3PLs surveyed – 62% – said that over the past two to three years, their customers showed interest in “changing their use of various modes of transportation,” with nearly three-fourths of shippers – 71% – emphasizing that real-time analytics from 3PLs help them better understand shipping alternatives, with 61% valuing 3PL assessments of trade lanes and origin-destination pairs in terms of cost and service levels.