As shippers continue to search for ways to consolidate global supply chain spending, more opportunities are arising for motor carriers to form partnerships with third party logistics (3PL) companies in order to win more business.
“Shippers are finding value and comfort working with fewer partners more capable of providing a broader scope of services than several different partners,” Leslie Ajlouny, vice president-business development for Evans Distribution Systems, told FleetOwner. “As many shippers expand their reach globally, working with a ‘one-stop shop’ becomes increasingly valuable.”
That’s actually creating more opportunities for trucking companies if they can partner with 3PLs, noted Doug Ostrowski, Evan’s vice president-transportation. “Seventy-seven percent of domestic Fortune 500 companies are using 3PLs for logistics and supply chain functions – and transportation is a key component of this work,” he stressed. “This represents an opportunity for trucking companies to win business.”
For example, the 16th annual “3PL Provider CEO Perspective” survey authored by Professor Robert Lieb of supply chain management studies at Northeastern University last year, said that while 3PL CEOs reported about one-quarter of their business relationships with their clients had become more adversarial as a result of the recession, in many some cases, that was at least partially offset by the emergence of more collaborative relationships with other customers.
Lieb’s survey found North American CEOs, in particular, reported more collaborative relationships with more than one-third of their customers.
“A 3PL … often brings greater versatility to a transportation solution whereas traditional trucking companies are limited by their current fleet,” noted Evan’s Ajlouny. “A 3PL partner may leverage their own assets as well as reaching out to other partners for additional capacity, specialized equipment, industry expertise, special certifications, multi-modal solutions, international expertise, etc., in order to develop a comprehensive solution at the most competitive price.”
Broader scope of services is another 3PL advantage, Ajlouny added, as 3PLs are more likely to be equipped to meet other related requirements to support the transportation solution including cross-dock services, warehousing solutions, value-added packaging, quality inspection/sortation, freight forwarding, etc.
“The bottom line is greater flexibility,” said Ajlouny. “Shippers value flexibility more today than ever before [as they] must quickly respond to growth opportunities as our economy recovers, [yet] doing so with caution as there is still tremendous uncertainty. Partnering with a 3PL provides the flexibility they need to respond immediately without making financial commitments in assets or traditional long-term agreements.”
“Although many trucking companies saw declines in loads over the last year, the economy is starting to pick up,” added Evan’s Ostrowski. “The transportation providers that survived need to stay competitive and be smarter than ever in going after new business. Contracting with a 3PL can be an effective inroad to more business opportunities and contracts.”
