Fleet Management

3PL Study Finds Growing Potential in Blockchain, Automation

October 04, 2017

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Image via Penske Logistics
Image via Penske Logistics

A global study stresses the importance of adapting to emerging technologies for third-party logistics companies and shippers, including blockchain and automation to provide better services to end customers.

The findings were part of the 22nd Annual Third-Party Logistics Study for 2018 that is a collaboration between Penske Logistics, Infosys Consulting, Penn State University, and Korn/Ferry. The specialized focus in this year’s report fell on blockchain, automation/ digitization, and he logistics talent revolution required for shippers and 3PLs to drive technology advancements as well as how shippers and 3PLs view their risk/resilience relationship.

It was the first time that the 3PL study investigated blockchain. Results showed that while 30% of 3PLs and 16% of shippers see blockchain as a potential application, they have yet to engage with the technology.

“Blockchain has the potential to make significant improvements in security, transparency, and governance, but only in supply chains where there is value in controlling consumer risk, valuable goods or complying with regulations,” said Ken Toombs, global head of Infosys Consulting. “Shippers and 3PLs will need to work together to drive value from blockchain, using lessons collectively learned from missteps with other emerging technologies, like Radio Frequency Identification (RFID).”

The potential of on-road automation, including driverless vehicles, was also examined in the study. The supply chain is already providing returns from increased automation, including digitalized load matching and warehouse robotics. While a majority of 3PLs and shippers want to invest in automation and digitization to stay competitive, a lack of in-house talent to develop, implement and monitor the technologies has prevented investment by some companies.

“Technology improvements in supply chain, especially in the area of fleet operations, have had positive impacts on the industry,” said Tom Scollard, Penske Logistics vice president of dedicated contract carriage. “It has allowed 3PLs to operate fleets that are safer and more efficient for the customer.”

Because of this focus on new technology and innovation, technology is reframing the demand on the workforce, according to the study, particularly within the supply chain where automation, digitization, and data collection capabilities are growing at a faster pace. Leaders and executives within the logistics and supply chain fields are more critical to companies as they move toward efficient and technologically advanced supply chains.

“To leverage the potential upside, organizations must now rethink their talent strategy from top to bottom,” said Neil Collins, regional managing partner for Korn Ferry’s North American industrial markets unit. “The supply chain/logistics leader must now be agile, a strategist, a visionary and a collaborator. The entire supply chain organization must now compete with technology, and the winners will be those that elevate their people using technology, rather than replacing them with it.”

Lastly, the relationship between 3PLs and shippers is still in need of improvement with 79% of 3PLs and 64% of shippers reporting that projects were directly impacted by a lack of complete, accurate, and consistent information provided by the shipper.

The study shows a large increase in the percentage of shippers seeking information technology services from 3PLs, with 27% indicating outsourcing of IT services in the 2018 study compared to 17% in the previous year.

However, the percentage of shippers indicating satisfaction dropped slightly this year from 65% to 56%, potentially due to higher expectations among shippers as technology has improved or because shippers are seeking enhanced analytical capabilities to help drive more effective supply chain decisions.

The full study is available for download here.

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