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Talking Logistics: “Want a Better Supply Chain? Here Are 4 Reasons to Outsource Your Transportation Management”

February 24, 2015

Want a Better Supply Chain? Here Are 4 Reasons to Outsource Your Transportation Management

Now more so than ever, corporations understand the tremendous impact logistics and transportation can have on their overall business performance and are taking meaningful strides to optimize their supply chain operations. While some organizations have the human capital, industry depth and expertise, and IT infrastructure to manage their transportation on an insourced basis, a majority do not. It’s simply not viewed as core competency or they lack the significant technical infrastructure to do so effectively or efficiently. It’s for this reason they outsource this business function to a third party that specializes in this area.

Third party logistics (3PL) and outsourcing of nearly every conceivable logistics function is a known, proven, and highly mature strategy that delivers near immediate financial and operational performance efficiencies that assist companies to reduce costs and improve supply chain performance. It’s for this reason an estimated 80% of Fortune 500 companies and 96 Fortune 100 companies use 3PL services in some form or fashion¹. But it’s not just limited to large corporations. Global 3PL revenues grew to $676.9 billion (U.S. dollars) in 2012 – a 9.9% increase over 2011, according to Capgemini’s 2014 18th Annual Third Party Logistics Study. In the United States alone, 3PL gross revenue increased 3.2% (a rate greater than our GDP) from 2012 to 2013 to $146.4 billion, according to a recent research report from industry watchers Armstrong & Associates.

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