- Shippers reported greater impacts from the coronavirus pandemic compared to 3PLs in key logistics functions, according to the 2021 Third-Party Logistics Study published Wednesday by Infosys Consulting, Penn State University and Penske Logistics.
- Despite reporting more comprehensive risk management processes, shippers reported higher levels of difficulty with labor, procurement of crucial supplies, driver shortages and operational equipment shortages, according to Infosys Supply Chain Practice Leader Sylvie Thompson, speaking at the Council of Supply Chain Management Professionals Edge virtual conference Wednesday.
- Shippers and 3PLs rank readiness and continuity planning, data analysis and visibility, and risk management as their top three priorities for improvement.
The pandemic has stretched the concept of risk management as historically practiced by shippers and 3PLs.
"Traditional readiness and continuity planning focused on single events, such as a hurricane or other natural disaster, a port closure or a facility shutdown, and created plans to divert to alternative locations for short durations," wrote the report authors. "COVID-19 presented a multi-facility, multi-country shut down."
Despite some early declarations of force majeure, 3PLs in the survey reported less pandemic-related operational difficulties, and Thompson had a hypothesis as to why.
"3PLs have the benefit of sharing labor across their customers. Particularly when they have warehouses and operations in hub cities or when they have co-mingling or collocated various customers," she said.
Though 3PLs may be having a relatively easier time of hiring and operating than shippers, the operating environment is still challenging, and 3PLs may be struggling to handle the customer service side of things, according to shippers.
"3PLs think that they are acting quickly enough, and the shippers don't seem to think that is as true," John Langley, clinical professor of supply chain management at Penn State University, said on the same CSCMP panel.
Nearly all respondents, 93% of shippers and 98% of 3PLs, said that the importance of timely, accurate responses from 3PLs to shipper inquiries has grown.
The difficulty in responding quickly to shipper concerns may be more about technology than staffing or operational priorities. Langley said that the lack of a "single source of truth" across shipper and 3PL digital systems hampers clear, timely communication.
"There was no unified view of everything that as happening at once," said Langley. This can lead to a misalignment of expectations. For example, shippers and carriers often have differing understandings about what will happen when an exception arises and when it should receive corrective action from a 3PL.
Despite communication challenges during the pandemic, the report's authors concluded that more outsourcing of logistics service will be one result of the pandemic, though the study expects total expenditure on outsourcing to be down YoY for the whole of 2020.
"Supply chains are likely to embrace more horizontal collaboration to preserve capital and concentrate on critical competencies," reads the report, adding that flexibility and agile technology tools that provide shared visibility will attract shippers, going forward.