3pl Report

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Outsourcing Logistics Report

Outsourcing Logistics – The latest trends in using 3PL providers

January 2005

For further details please contact: Laura Goddard lgoddard@eyefortransport.com US Toll Free: 1 800 814 3459 ext 321 Rest of World: +44 (0) 207 375 7231

Outsourcing Logistics 2005: Best Practice for Managing 3PL Relationships April 25-26 2005 - Hyatt Regency McCormick Place, Chicago, IL www.eyefortransport.com/outsourcelog

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Outsourcing Logistics Report

Table of Contents:

I II III IV V VI VII

Introduction ……………………………………………………..………. 3 Survey overview …………………………………………….…………. 3 Overall use of 3PL services …………………………….…........... 4 Key drivers in outsourcing logistics to a 3PL …….……........ 5 Overall performance of 3PL providers …………………..….…. 6 Will companies increase their use of 3PLs ……………...…... 7 What percentage of companies not currently using 3PLs are planning to use a 3PL in the future ……..……….... 8

VIII IX

Overall industry implications and conclusions ……..…….…. 9 Outsourcing Logistics 2005: Best Practices for Managing 3PL Relationships Conference ………………………….… 11

Outsourcing Logistics 2005: Best Practice for Managing 3PL Relationships April 25-26 2005 - Hyatt Regency McCormick Place, Chicago, IL www.eyefortransport.com/outsourcelog

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Outsourcing Logistics Report

I

Introduction

The 3PL industry has been growing at a steady rate, and it’s clear that more and more industry verticals are seeing real benefits from outsourcing their logistics operations to a third party. Manufacturers and retailers are continually pressured to reduce transportation costs, which has created an opportunity for companies that are able to provide more favorable rates and increase overall supply chain efficiency. Recent statistics have even shown that shippers’ logistics costs have been reduced when outsourcing to 3PLs at an average of more than 15% in North America! However, it is still a difficult decision for many to outsource. So what are the key reasons ‘shippers’ choose to outsource and how do they rate the value of their contracts? eyefortransport conducted the Outsourcing Logistics Survey from December 2004 to January 2005. This survey was timed to coincide with the eyefortransport Outsourcing Logistics 2005: Best Practices for Managing 3PL Relationships conference, April 25-26 2005 in Chicago. Much of the data gathered in this report will be discussed and debated at the conference. For more information on the eyefortransport survey results or the conference, contact Laura Goddard at lgoddard@eyefortransport.com, 1 800 814 3459 ext 231 or +44 (0) 207 375 7231.

II

Survey overview

173 logistics professionals from manufacturing and retail companies responded to the survey, which was conducted by eyefortransport. Responses were solicited in a targeted email campaign that included select trade associations, industry related databases, and other highly specific groups. Respondents were asked a number of questions, to establish: the percentage of companies currently using 3PL services, what percentage of their overall logistics operations are outsourced, what the key drivers were and the overall performance of 3PLs. They were also asked how much they plan to increase logistics outsourcing in the future and whether they see 3PLs as supply chain suppliers (service providers) or supply chain partners.

Outsourcing Logistics 2005: Best Practice for Managing 3PL Relationships April 25-26 2005 - Hyatt Regency McCormick Place, Chicago, IL www.eyefortransport.com/outsourcelog

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Outsourcing Logistics Report

III

Overall use of 3PL services

Based on the responses to the survey, it is clear that manufacturers and retailers consider 3PL services to be a viable option. A strong 79% are currently using 3PL services for their logistics operations, which is in line with other industry reports. However, it is interesting to see that shippers rarely outsource 100% of their logistics...
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