The rapid pace of technological innovation is transforming the logistics landscape. It fundamentally changes how 3PLs operate and the capabilities shippers expect from their providers. As shippers' expectations increase, IT systems and technical expertise are an essential differentiator for 3PLs.
Although this year's study results are encouraging, some of the relatively high percentages and usage rates respondents report may reflect aspiration more than reality. While both shippers and 3PLs are clearly engaging with emerging technologies, their current adoption does not yet appear to be at an “advanced” level. More likely, use of the term “advanced” conveys a sense of superiority associated with emerging technologies when compared to legacy approaches.
The overwhelming majority of shippers (90%) consider technological capabilities critical when selecting a 3PL. However, only 57% say they are satisfied with 3PL providers' technology capabilities, indicating that an “IT gap” remains.
Agile and responsive supply chains are increasingly important to shippers looking for their logistics partners to help manage risk and anticipate disruptions proactively. This is leading to a surge in the utilization of advanced analytics. 3PLs rank advanced analytics as their top IT-based priority, while 61% of shippers list it as an IT-based need.
Adoption rates reflect this alignment, with 80% of shippers and 81% of 3PLs reporting that they use advanced analytics.
Artificial intelligence (AI) and machine learning (ML) are also gaining prominence for their ability to enable better use of data across the supply chain. In this year’s study, 67% of shippers and 73% of 3PLs say they leverage AI and ML solutions. Network optimization is another area where technology is having an impact, with 90% of shippers and 69% of 3PLs utilizing it to some extent.
Digital supply chains are being used to improve the flow of goods, information and finances. Among shippers, 70% report significant use of digital supply chain technologies, compared to just 13% of 3PLs. This gap is likely to recede as 3PLs make related investments to better meet shipper expectations.
While emerging technologies provide clear benefits, many 3PLs acknowledge substantial barriers to adoption. The most significant challenges are related to securing capital and building compelling business cases for new tech investments. Additional challenges include a lack of skilled talent (29% of 3PLs) and concerns around trust in the technology, risk aversion and scalability, with 24% of 3PL respondents noting each.