Convergence is the Word for 3PLs

I’m at the MercuryGate User Conference today, where later this afternoon I’ll be moderating a panel session with executives from leading third-party logistics providers. One of the business models in the 3PL industry that continues to gain traction and evolve is the agency/franchise model, and the panelists will share their perspective on this model — Why adopt it? What benefits and challenges does it present? — as well as discuss the key trends impacting the transportation and logistics industry.

One of those trends is the convergence I described in a recently-published article I wrote for CSCMP’s Supply Chain Quarterly. Here is a brief excerpt from the article:

If I had to describe the state of the 3PL industry in one word it would be convergence, which is happening on two fronts. The first front is the convergence of fragmented logistics services into integrated logistics solutions — as 3PLs fend off the risk of commoditization by positioning themselves as one-stop-shop (or end-to-end) solution providers.

But there’s another convergence taking place in the market, one that’s driven by the changing needs and expectations of customers. This second convergence is transforming the very definition and value proposition of 3PLs. What we are seeing is the convergence of business models, specifically the business models of service providers, technology companies, and consulting firms.

I encourage you to read the full article, then post a question or comment and let me know what you think. I’ll also share my key takeaways from today’s panel session and the rest of MercuryGate’s User Conference in a future post.

 

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