3PL Perspectives Report 2024: Tough Times & Tech Trends

The 2024 Inbound Logistics 3PL Perspectives report is out, and it’s clear: third-party logistics (3PL) providers are navigating through dark times. Revenues are down, and demand growth has slowed, all while inflation, high taxes, and government regulations drive up costs. Here are some of the keys points from the report.

Big Challenges

• Rising Operational Costs: 73% of 3PLs report higher costs, up from 62% in 2023.
• Customer Retention: 45% struggle to find and keep customers, a 12-point increase from last year.
• Profit Pressures: 26% face profitability issues, compared to 16% in 2023.

Tech and Innovation

• Technology Investments: 62% of 3PLs find tech investments challenging.
• Labor Challenges: Finding and training qualified workers is a concern for 57% of 3PLs.
• AI Adoption: 87% expect AI to revolutionize operations.

Service Offerings

• Specialized Services: 89% offer logistics/transportation consulting, a steady increase over the years.
• Green Logistics: Focus on sustainability rises, with 66% offering green logistics services.
• Crisis Planning: Jump from 31% to 43% in 3PLs offering contingency planning.

Shipper Concerns

• Cutting Costs: 41% of shippers prioritize reducing transportation costs, up from 37%.
• Process Improvements: 8-point rise in concern for business process improvements.
• Customer Service: Concerns about enhancing customer service jumped 10 points.
• Customer Service Decline: Poor service cited by 36% of shippers as a top deal breaker, down from 60%.
• Rising Importance of Cost: 21% of shippers cite cost as a top reason for ending partnerships, up from 11%.
• Service Value: Despite cost concerns, 74% of shippers say service is more important than price.

3PLs continue to be essential partners, offering services from motor freight to sophisticated logistics planning. Despite a tougher market, they are adapting with a sharper focus on tech, efficiency, and sustainability. Though times are hard at the moment, everyone is doing what they can to bring in the light. Things are bound to change in due time, hopefully for the better.

Take a look at the full report below.

Source: Inbound Logistics