1999 CEO PERSPECTIVES ON THE CURRENT STATUS AND FUTURE PROSPECTS OF THE THIRD PARTY LOGISTICS INDUSTRY IN THE UNITED STATES
Over the past 6 years, an annual survey of the chief exectuive officers (CEOs) of 25 of the largest third party logistics (3PL) companies has provided insight into the industry's impressive growth. In 1999, a mail questionnaire focused on a variety of issues including the evolution of the 3PL industry, alliance building, the industry's service offerings, the selling of 3P services, the current status and future prospects of the industry, the industry's sales cycle, the sources relied upon for the industry's managerial talent, alliances with information technology (IT) companies, and the industry's potential in supporting electronic commerce (e-commerce). In 1999, the major revenue sources of the 25 3PL companies continued to be transportation and warehousing related services, but integrated supply chain management services increased in importance. Nearly 75% of the customers of these companies were clients with annual sales revenues in excess of $500 million. The average length of the sales cycles was approximately 9 months. Respondents believed that their typical customer assigned a weight of approximately 56% to cost considerations and 33% to service considerations in selecting a 3PL provider. All 25 CEOs indicated that their companies were becoming more customer selective and focused their sales efforts on potential clients with similar cultures, value systems, and perceptions. On average, 89% of the contracts that came up for renewal last year were renewed. Eighteen of the companies had established strategic alliances with one or more IT companies. According to the CEOs, the major dynamics operating in the 3PL marketplace are increased customer desire for one-stop shopping, continued downward pressure on prices, growing customer interest in outsourcing a broader array of service, and the growth of e-commerce. E-commerce was identified as the most significant opportunity in the 3PL marketplace, followed by expansion of integrated supply chain services and continued globalization.
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Corporate Authors:
Council of Logistics Management
2805 Butterfield Road, Suite 200
Oak Brook, IL United States 60523 -
Authors:
- Lieb, R C
- Peluso, L A
- Conference:
- Publication Date: 1999
Language
- English
Media Info
- Features: Figures; Tables;
- Pagination: p. 379-399
Subject/Index Terms
- TRT Terms: Contracting out; Contractors; Costs; Electronic commerce; Executives; Industry structure; Information technology; International trade; Inventory control; Logistics; Markets; Prices; Professional personnel; Quality of service; Revenues; Strategic alliances; Supply; Supply chain management; Surveys; Transportation; Warehousing
- Identifier Terms: Council of Logistics Management
- Subject Areas: Administration and Management; Data and Information Technology; Transportation (General); I10: Economics and Administration;
Filing Info
- Accession Number: 00788923
- Record Type: Publication
- Files: TRIS
- Created Date: Mar 13 2000 12:00AM