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

5904 words 24 pages
ROBERT C. LIEB BROOKS A. BENTZ

The Use of Third-Party Logistics Services by Large American Manufacturers: The 2003 Survey
Abstract
This article reports the findings of a survey of large American manufacturers concerning their use of third-party logistics services. Data generated in the survey show that the use of such services by this group of companies continues to grow and that the service providers continue to deliver logistics cost and service improvements to their customers, both domestically and internationally. Many of the users of third-party logistics services now share their service provider with their large vendors and customers, and this has contributed to supply chain integration. Few existing 3PL relationships were
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Use of 3PL Services by "User" Vendors and Customers. It is widely contended that the most significant benefits of progressive supply chain management come from true integration of services along the supply chain (Demers and Sathyanarayanan 2003). In that regard, the authors were interested in determining if the primary third-party logistics provider employed by the 3PL users identified in this survey also serviced the major vendors and cus-

Usage Rates Fifty-five (83 percent) of the sixty-six survey respondents indicated that their companies use 3PL services, and in subsequent sections of this article they are referred to as users. The reported 3PL usage rate was up substantially from that reported in the past few years (65 percent in 2002), and this is the highest 3PL usage rate ever reported in the annual surveys. This also marked the seventh consecutive year that approximately two-thirds or more of the respondents were 3PL users. The growth in the use of 3PL services is best illustrated by the fact that in 1991, when the initial survey in this series was conducted, the percentage of Fortune 500 manufacturers reporting use of 3PL services was 38 percent. Among the users identified in the year 2003 survey, 2 percent had been using 3PL services for less than one year (4 percent in 2002), 9 percent had been using 3PL

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