The Use of Third-Party Logistics Services by Large American Manufacturers: The 2004 Survey

TLDR

Large American manufacturers increasingly rely on long‑term third‑party logistics partners that expand geographically to support sourcing, manufacturing, and sales, and the forthcoming adoption of RFID technology is expected to present new operational challenges for these providers. The study surveys large American manufacturers in 2004 to assess their use of third‑party logistics services. Survey results reveal that a record‑high proportion of large manufacturers use 3PL services and are allocating a growing share of their logistics budgets to these providers.

Abstract

Abstract This article examines the findings of a survey conducted during 2004 of large American manufacturers that addressed their use of third-party logistics (3PL) services. The survey data show that the percentage of those companies using such services is at a record high level, and that users are giving a steadily increasing percentage of their logistics operating budgets to 3PL service providers. Many 3PL relationships are long-term in nature, and the service providers continue to deliver value to their clients. The movement of large American manufacturers into other geographies for sourcing, manufacturing, and sales has led many of their 3PL service providers to expand into those areas to support those activities. During the next several years, the possible adoption of radio frequency identification (RFID) technology by many of these manufacturers will pose significant challenges to their 3PL providers in attempting to meet the related needs of their clients.