Last year at this time, in an article I wrote for CSCMP’s Supply Chain Quarterly, I stated that if I had to describe the state of the third-party logistics (3PL) industry in one word, it would be convergence — as in the convergence of fragmented logistics services into integrated logistics solutions, as well as the convergence of business models, specifically the business models of service providers, technology companies, and consulting firms.
We are more than halfway through 2015 and it’s clear that this convergence is not only still happening, it’s accelerating. Just look at the number of large M&A deals announced in recent weeks, including UPS buying Coyote Logistics and Geodis Group acquiring Ozburn-Hessey Logistics. And the continued merging of business models, as evidenced by Ryder introducing a transportation planning tool and C.H. Robinson introducing a transportation management system (TMS) for small and mid-sized businesses.
What does this all mean for shippers and 3PLs?
I share my thoughts in a follow-up article published this week by CSCMP’s Supply Chain Quarterly titled “Convergence Accelerates—But Will Shippers Buy In?” Here’s the subheading:
As 3PLs expand their value proposition through mergers and more comprehensive offerings, many shippers still continue to treat them as commodities, sabotaging both parties’ chances for success.
I encourage you to read the full article for my perspective, which I end with this simple advice for shippers and 3PLs that seek profitable growth in the years ahead: Be bold and different. Otherwise, you might find yourself caught in the middle, or in a failed relationship, with nowhere to go.
After reading, post a question or comment and let me know what you think.