3PLs: Best-of-Breed or One-Stop-Shop?

After a decade of acquisitions, XPO Logistics announced in March 2022 that it planned to “separate its brokered transportation services from its less-than-truckload (LTL) business in North America [and] divest its European business and North American intermodal operation.” According to XPO’s CEO Brad Jacobs, “Our experience is that customers want high levels of service and they want pure-plays…When you have a [3PL] management team doing one thing and being an inch wide and a mile deep in one line of business, they’re more focused and fit for purpose to drive growth.” 

In contrast, you have other third-party logistics providers (3PLs) that continue to acquire other providers to expand their scope of services (see Maersk, as an example).

When looking for a 3PL partner, do you prefer a Best-of-Breed or a One-Stop-Shop provider? 

We asked members of our Indago supply chain research community — who are all supply chain and logistics executives from manufacturing, retail, and distribution companies — that question last March.

Almost three-quarters of our member respondents (72%) said they would prefer to work with a Best-of-Breed provider (one that specializes in a specific logistics function) instead of One-Stop-Shop.

Indago survey, March 2022 (n = 25)

“I always lean towards providers who excel at having focus,” said one Indago supply chain executive. “Be great at one thing and I’ll give you my business. If you try to do too much, you’ll lose out on quality.”

Here are some other value-added comments from our members:

“My ‘perfect world’ preference is Best-of-Breed. But as a practical matter, we find it difficult to effectively integrate across multiple 3PL providers (in all aspects — business, operations, technology). So, where we have ended up is to identify the ‘Best-of-Breed’ of the One-Stop-Shops.”

“I think mergers and acquisitions are rarely good for the customer. It is very difficult to integrate services and technologies between established companies.”

“One-Stop-Shop is a ‘nice to have’ feature, but a Best-of-Breed is a ‘must have’ feature.” 

“I am a fan of One-Stop-Shop, if there are economies of scale benefits, as there should be.”

“Best-of-Breed is more important than One-Stop-Shop. From my perspective, all shipments are important, and many 3PL partners specialize in specific modes or lanes, making more sense to follow a Best-of-Breed [approach]. The One-Stop-Shop would only be beneficial if it was able to provide excellent skills and expertise across all modes and lanes.”

We also asked our Indago members, “What factors are most important in your 3PL selection process?” For more insights from the research, Indago members can download the report at our website.

What do you think? When looking for a 3PL partner, do you prefer to work with a Best-of-Breed or One-Stop-Shop? Do you believe all of the mergers/acquisitions in the 3PL industry are positive for shippers — i.e., provide shippers with more value and benefits — or are they negative for shippers? Post a comment and share your perspective! 

The One Email Supply Chain Professionals Do Not Delete

If you’re like me, you probably get multiple emails per week requesting to take a web survey.

If you’re like me, you probably delete most or all of them. 

Indago is different. Let me tell you why.

Although there is great demand in the industry for trusted and meaningful supply chain market research, the traditional approach has many shortcomings:

  • Too many unsolicited emails sent to databases of contacts, with little or no consideration to respondent profiles.
  • Surveys that are too long and take too much time to complete, which results in low response rates.
  • Concerns about confidentiality or solicitation. Many industry professionals are hesitant to participate in surveys because they do not want their contact information shared with third parties, which could lead to email or phone solicitations.
  • Limited value or incentives to participate. It usually takes several weeks to receive the research results, and the process is generally one-way — that is, respondents aren’t able to ask their own questions to their peers.

Indago was created to overcome these shortfalls by taking an uncommon approach to market research. We bring together a curated and validated community of supply chain and logistics practitioners who are committed to sharing practical knowledge and advice with each other (via quick and short micro surveys) in a trusted and confidential manner — while giving back to charitable causes (over $17,000 to date) that make an extraordinary difference in lives every day.

Here is a testimonial from one of our executive members, the VP of Operations at a $100-$500M Retailer:

“When I was first contacted to join Indago my initial thought was I do not need another form of communication coming my way that I really do not have time to read. Because of the people involved I decided to take a chance and it has greatly helped me and my organization. I spend very little time answering the weekly surveys but I do get great information in return. I share the research results with my entire team which helps them understand different industries/opportunities. One of the other benefits is the wide range of survey topics, focusing on technology, processes and most importantly, people. I now find myself excited to get the results of each survey to see if others have the same issues or better, they have a great idea to solve it.”

There is one email supply chain and logistics professionals do not delete: our invitation to share their insights and advice with their peers on a wide variety of industry topics.  

Experience the difference. Join Indago today.

(Please note: There is no cost to join Indago, but membership is only for supply chain and logistics professionals from manufacturing, retail, and distribution companies. If you’re a Technology Vendor, Third-Party Logistics Provider or Consultant, please do not apply. If you would like to learn how you can receive our research reports, please contact us.)