Monday, September 24, 2012
Report: More than 40 percent of shippers will put logistics services out to bid over next year
More than 40 percent of companies that outsource work will conduct a bid or rebid for part of their network to a logistics service provider (LSP) over the next year, state a new report by the Tompkins Supply Chain Consortium.
Companies are typically driven to outsource due to cost, flexibility, and capital issues, as well as improved access to advance capabilities.
“Despite the uncertainty in the economy, shippers are finding their existing networks in need of additional capacity,” says Tim Pyne, VP at Tompkins International and co-author of the report. “They look to LSPs to fill this gap and want to ensure that they join up with a provider that meets their performance expectations.”
The survey-based report compiled responses from 95 shippers of retail, consumer, industrial and wholesale products on trends in outsourced distribution. These companies say the largest categories in which LSPs need to improve are innovation and problem solving.
Of companies that already hire third party service providers, most are content with their LSP’s performance in terms of flexibility, safety, order fulfillment accuracy, and turnaround.
More than half of the surveyed companies already outsource at least part of their distribution operations. About 74 percent have signed a long-term contract of three years or more with an LSP.
Tompkins Supply Chain Consortium is a source for supply chain benchmarking and best practices data with more than 350 participating retail, manufacturing and wholesale/distribution companies, including Domino’s Pizza, Target, GlaxoSmithKline, Hallmark, and the Coca-Cola Company.
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