Results and Findings of the 2004 Ninth Annual Study

Participants:

C. John Langley Jr., Ph.D., Georgia Institute of Technology

Gary R. Allen, Capgemini U.S. LLC

Thomas A. Dale, FedEx Supply Chain Services, Inc

Table of Contents

Introduction........................................................................................1

Study Objectives and Methodology ...................................................1

Summary of Key Findings .................................................................5

Logistics Outsourcing Practices in Profile .........................................8

3PL Service Offerings and Technology..............................................13

Management and Relationship Issues ...............................................19

Customer Value Framework...............................................................26

Strategic Assessment..........................................................................30

Appendix: 3PL User Focus Group Sessions.........................................34

About the Participants.........................................................................35

Contact Information.............................................................................37

Introduction

This report presents the findings from the Ninth Annual Third-Party Logistics Study. This study identifies and tracks key trends and views of the third-party logistics (3PL) industry from the perspectives of customers who purchase and use 3PL services. Over the years, this study has grown in terms of the regions and industries examined. Also, each annual study addresses key issues that have emerged from time to time relevant to the logistics and 3PL industries.

Study Objectives and Methodology

During the spring and summer of 2004, C. John Langley Jr., Ph.D., of the Georgia Institute of Technology, with Capgemini and FedEx, conducted an extensive study about using 3PL services in North America, Western Europe, Latin America1, and Asia-Pacific.2 This is now the ninth annual research study to examine critical trends and issues among key markets and key customers in the 3PL industry.

Study Objectives

• Measure the development and growth of the 3PL industry across major industry segments and across several diverse regions of the world.
• Identify customer needs and how well 3PL providers are responding to those needs.
• Understand how customers select and manage 3PL providers.
• Examine why customers outsource or elect not to outsource to 3PL providers.
• Summarize the current use of 3PL services.
• Investigate leading topics, including 3PL service offerings and technology, how to structure and manage effective 3PL relationships, and how customers view success and value from 3PL relationships.
• Provide a strategic assessment of the future of the 3PL industry. An important goal of each year’s 3PL study is to improve upon the previous years’ studies. The following are ways in which the 2004 3PL study was modified to enhance the scope of earlier studies:
• Continued to expand the 3PL study to meaningfully include Asia-Pacific, Latin America, North America, and Western Europe (see Exhibit 1).3
• Revised content and terminology to be current and to respond to recent advances in the logistics, supply chain, and 3PL/4PL industries.
• Continued using the Internet to conduct the study. The 2004 3PL study used a webbased commercial firm to administer and manage all survey activities in a global setting, including survey e-mailing, tabulation, and preparing reports for analysis.
• Expanded the approach to getting feedback and perspectives about this year’s study results and about using 3PL services in general from leading logistics executives. This year, the study team conducted four telephonic user focus group sessions.4 Further information about these focus groups is included in the appendix of this report.