3PL Growth Potential

Third party logistics providers have been on a growth path since the recession starting with growth in knowledge and capabilities through acquisition of talent during the downturn in the market.  This was a long journey for the leading providers and required a great deal of belt tightening in order for them to survive, however, I believe that it was worth the effort for both the survivors and the market as a whole.  It took some vision and patience to see the potential and the leaders in the third party logistics market are now reaping the benefits of their struggles. The market has changed dramatically through both the services offered by the providers and also the changes to the market that these providers have enabled, from dramatic consumer delivery changes to the tracking and traceability capabilities the market is a better place now as a result of the leaders in the third party logistics providers marketplace.

Now though the real change will be delivered to the market through these providers as they mature and the technology really takes off.  I expect there to be dramatic growth in capabilities and market share for these providers. The key to the growth and expansion really comes down to the demands of the consumer and changes in the consumer collaboration and interaction as consumers combine social technology along with new network and service capabilities to support their lifestyles.

Think about it, every advancement in technology and market capabilities has been driven by consumers over the last 15 years at a minimum.  The market is becoming more segmented at the same time as it is becoming more collaborative. This means that third party logistics providers will succeed or fail based on their abilities to shape the supply chain capabilities to meet the consumer demands.  There is no longer a basis for the large legacy retailers to support their supply chain needs, in fact, these needs would be best suited to be support by a network of collaborative partners, including third party logistics providers, to develop the tools and technologies that will bring the market forward.  There is no longer an opportunity for larger retailers, manufacturers or service providers to control the market outright and demand abeyance.

The future holds a continued growth of 3PL providers an a withering of supply chain capabilities by retailers and manufacturers because they will not be able to compete based services and cost.  The market will be taken over by third party logistics providers and probably Amazon, but I consider Amazon to be a type of third party logistics provider. The future market requires specialization and collaboration capabilities and also services to support the growth and velocity of change.  These are exciting times for third party logistics providers and they must take advantage of the opportunities and think big. There will be great opportunities in the market and these opportunities require a great deal of imagination and also collaboration to be in the position to leverage the change.