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

5881 Words24 Pages
ROBERT C. LIEB BROOKS A. BENTZ

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
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In past surveys, 3PL users have clearly indicated their preference for one-stop 3PL shopping. However, as potential buyers have increased in size through sales growth, mergers and acquisitions, and international expansion, the scope of service offerings and geographical coverage involved in many recent 3PL contracts has made it increasingly difficult for one provider to meet those requirements (Gooley 2002). This makes the management of 3PL relationships more complex, and it requires effective cross-corporation management skills to realize the potential benefits of such relationships (Bowersox, Closs, and Stank 2003). 3PL Services Used Fortune 500 manufacturers use a wide variety of 3PL services. The typical user buys multiple logistics services from their provider(s). The range of services used by this year's users is shown in Table 1. The table also includes similar data from the three most recent surveys. As shown, respondents indicated that the most frequently outsourced logistics functions in 2003 were freight payment services (72 percent), shipment consolidation (66 percent), direct transportation services (62 percent), customs brokerage (62 percent), warehouse management (60 percent), freight forwarding (53 percent), cross-docking (53 percent), carrier selection (51 percent), and tracking/tracing (51 percent). The usage rates reported in most categories increased since last year's survey.

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