The years following the COVID-19 pandemic continue to challenge the trucking industry. Analysts predicted we’d be climbing out of the hole by now, but tariffs and regulatory policy are further pushing the freight recovery timeline. How are shippers and carriers dealing with this tough environment?
To combat market volatility, both shippers and carriers are focusing on strategic partnerships that are mutually beneficial, according to the latest Annual Third-Party Logistics Study from NTT Data and Penn State University.
The study surveyed an undisclosed number of shippers and 3PLs in leadership, management, or analyst roles.
Here’s how they believe the current market and technology impact operations.
Evolving 3PL market dynamics: How shippers’ expectations are driving logistics performance
They say that less is more—that is, unless you’re a shipper. Increasingly, shippers desire that their carrier partners offer more visibility, more transparency, and more on-time deliveries—all without shipper intervention. In essence, shippers are choosing carrier partners and 3PL providers based on performance, the report states.
“It’s no longer sufficient to simply execute, moving freight from Point A to Point B,” according to report authors. “Shippers demand continuous improvement, value creation, and the targeted use of technology and expertise to drive efficiency and insight.”
Further, shippers expect 3PLs to “adapt to changing market conditions” within the scope of their contractual agreements, minimizing impact on shippers’ costs. This expectation reflects the trend that shippers prefer 3PLs to take on more risks, emphasizing “mutual value creation, adaptability, and trust,” the report states.
Despite market challenges, 3PLs seem to be meeting these shipper expectations.
According to this year’s report, 88% of shippers believe their 3PL providers solve their needs and challenges, compared to 69% last year. According to 75% of shippers, 3PLs also contribute to reducing overall logistics costs, which is up from 66% of shippers who said the same last year.
Shippers are also concerned with their 3PL’s use of technology, as they “increasingly expect high levels of visibility and data-driven insights,” the report states. However, 3PLs’ and carriers’ use of technology tend to be two-fold: Add value to the shipper through visibility as well as to benefit their own business via asset utilization improvements, predictive analytics, and to strengthen “agility and resilience,” according to the report. (The second installment of this series dives more into 3PL technology utilization.)
Strategic shipper–3PL partnerships: Enhancing visibility, collaboration, and operational efficiency
The Annual Third-Party Logistics Study sought to understand whether shipper and 3PL relationships are indeed moving from “transactional to strategic,” or if it’s just the latest talking point at industry conferences, as FleetOwner recently reported.
The study accomplished this by identifying the drivers behind strategic partnerships, which largely boiled down to industry challenges and mutual benefits.
