The Use of Third-Party Logistics Services by Large American Manufacturers

Topics: Logistics, Supply chain management, Third-party logistics Pages: 18 (5896 words) Published: October 18, 2012

The Use of Third-Party Logistics Services by Large American Manufacturers: The 2003 Survey Abstract
This article reports the findings of a survey of large American manufacturers concerning their use of third-party logistics services. Data generated in the survey show that the use of such services by this group of companies continues to grow and that the service providers continue to deliver logistics cost and service improvements to their customers, both domestically and internationally. Many of the users of third-party logistics services now share their service provider with their large vendors and customers, and this has contributed to supply chain integration. Few existing 3PL relationships were harmed by the recession as many providers and users collaborated to address related issues. The use of third-party logistics (3PL) services is an important option to be considered by large manufacturers as they develop supply chain strategies. 3PL providers offer such companies a broad range of services, not only in the domestic marketplace, but in the international arena as well. Executives considering the use of such services are faced with a complex decision, which involves a series of important control versus cost/service improvement trade-offs that must be evaluated in the context of a rapidly changing 3PL industry. The industry continues to evolve, and it is important to both 3PL providers and users of their services that industry dynamics be documented to facilitate the development of corporate supply chain strategy. This study provides insight into the user side of the 3PL marketplace. This article summarizes the findings of a 2003 survey that was part of an ongoing research effort that annually examines the use of 3PL services by U.S. Fortune 500 manufacturers. The initial survey was conducted in 1991, and annual surveys commenced in 1994. Mr. Lieb, EM-AST&L, is professor of supply chain management, College of Business Administration, Northeastern University, Boston, Massachusetts 02115; e-mail Mr. Bentz is associate partner, Accenture, Wellesley, Massachusetts 02481; e-mail

The annual surveys gather aggregate data about the use of 3PL services in American industry and provide a basis for comparison with the results of our earlier studies. Each year the research effort focuses on the following issues: • The extent to which those companies use 3PL services in their operations • The specific 3PL services used • The impact of the use of those services on such issues as logistics cost, service levels, customer satisfaction, and employees • The future plans of users In the 2003 survey, questions were added concerning these matters: • Identification of the 3PL services that have yielded the greatest cost and service benefits to users • The importance of 3PL providers in establishing and maintaining effective IT linkages with major customers and suppliers • The impact of the continued economic slowdown not only on the volume of business given to 3PL providers, but also the nature of the relationship between users and providers • The extent to which these companies operate in China and their use of 3PL services in that country





A mail survey consisting of a cover letter, questionnaire, and postage-paid return envelope was sent to the chief logistics executive of each of the 500 largest manufacturers in the United States, based on annual sales revenues, as identified by Fortune magazine and a variety of other sources. The executives included in the survey were selected primarily from the membership directory of the Council of Logistics Management and phone calls to individual companies. Of the 500 questionnaires distributed, sixty-six completed questionnaires were returned (same as the 2002 survey), and thirtynine were returned as undeliverable. The effective response rate was 14 percent....

References: Atkinson, Helen (2003), "British (and Dutch, German, and Swiss) Invasion," DC Velocity 1(15), 46-48. Bowersox, Donald J., David J. Closs, and Theodore P. Stank (2003), "How to Master Cross-Enterprise Collaboration," Supply Chain Management Review 7(4), 18-27. Demers, David and Priya Sathyanarayanan (2003), "Charting the Supply Chain DNA," Supply Chain Management Review 7(6), 48-55. Gooley, Toby B. (2002), "One-Stop Shopping: Shippers Want It: Can They Get It?" Logistics Management 41(5), 45, 47, 40-50. Lieb, Robert and Stephen Kendrick (2003), "The Year 2002 Survey: CEO Perspectives on the Current Status and Future Prospects of the Third-Party Logistics Industry in the United States," Transportation Journal, 42(3), 5-16. Lieb, Robert and John Miller (2002), "The Use of Third-Party Logistics Services by Large American Manufacturers, the 2000 Survey," International Journal of Logistics: Research and Applications, 5(1), 1-12.
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