The 2018 Third-Party Logistics Study Highlights Potential of Blockchain and Digitization/Automation in Supply Chain

NEW YORK, Sept. 26, 2017 /PRNewswire/ -- Penske Logistics, the global logistics and supply chain management provider, Infosys Consulting, the strategy and transformation consulting arm of Infosys, a global leader in consulting, technology and next-generation services, Penn State University, and global talent advisory firm Korn/Ferry, today announced findings from the 2018 22^nd Annual Third-Party Logistics (3PL) Study, which examines the global outsourced marketplace and leading trends for shippers and 3PLs in the logistics industry.

This year's study shows the continuation of two trends: the importance of the relationship between shippers and 3PLs, and the importance of adapting to emerging technologies, including blockchain and automation. The result of these closely-forged relationships is improved services to the end customer.

The specialized focus in this year's report are blockchain, automation/ digitization, the logistics talent revolution required for shippers and 3PLs to drive technology advancements, as well as how shippers and 3PLs view their risk/resilience relationship.

Blockchain
This is the first time that the 3PL study investigates blockchain. Results show that while 30 percent of 3PLs and 16 percent of shippers see blockchain as a potential application, they have yet to engage with the technology. The study describes anticipated benefits including improved supply chain visibility and potential challenges that participants will face in implementing blockchain.

"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)."

Automation/ Digitization in Transportation
The study describes some of the exciting potential with on-road automation, such as driverless vehicles. It also describes many ways in which automation is already providing returns across the supply chain through digitalized load matching and warehouse robotics. Competitiveness is a key driver for a majority of 3PLs (62 percent) and shippers (57 percent) to invest in automation/ digitization. However, the report also revealed a number of reasons for lack of investment in digitization and automation, including a lack of in-house talent to develop, implement and monitor (12 percent of 3PLs and 10 percent of shippers).

"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."

Logistics Talent Revolution
Technology is reframing the demands on the workforce, particularly within the supply chain where automation, digitization and data collection capabilities are growing rapidly. Supply chain leaders and logistics executives play even more critical roles as companies work to build more efficient and technologically advanced supply chains.

"It's no surprise that technology continues to unlock unforeseen value across the global supply chain in a variety of ways," said Neil Collins, Regional Managing Partner for Korn Ferry's North American Industrial Markets. "To leverage the potential upside, organizations must now rethink their talent strategy from top to bottom. 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."

Risk/Resilience in Shipper-3PL Relationships
Through all the technological advances, the opportunity to improve upon the risk/ resilience relationship between 3PLs and shippers continues: 79 percent of 3PLs and 64 percent of shippers report they have been involved in projects in which the ability to execute quickly was directly impacted by 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 (IT) services from 3PLs, with 27 percent indicating outsourcing of IT services in the 2018 study compared to 17 percent in the previous year. However, the percentage of shippers indicating satisfaction dropped slightly this year from 65 percent to 56 percent, 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.

About the 2018 Third-Party Logistics Study 
Since 1996 this study has documented the significant transformation of the 3PL industry. In that time, 3PLs evolved from tactical service providers to become, in the most evolved relationships, collaborative partners delivering a comprehensive suite of integrated logistics services. Dr. C. John Langley, Clinical Professor, Supply Chain Information Systems and Director of Development, Center for Supply Chain Research at Smeal College of Business at The Pennsylvania State University, initiated this study to capture and measure this rapidly evolving industry. The study has evolved in both reach and scope, as has the participation rate among members and affiliates of the Annual Third-Party Logistics Study's partner organizations. As part of this year's survey process, the study attracted 580 respondents, a 65 percent increase over the number of participants taking part last year. The study report and additional materials are also presented on a dedicated website, www.3PLstudy.com. 

Penske Logistics
Penske Logistics is an award-winning leader in logistics and supply chain management. Founded in 1969 and headquartered in Reading, Pennsylvania, the company has offices and operations in North America, South America, Europe and Asia. Penske Logistics employs approximately 16,000 associates worldwide. The company offers a wide range of solutions including: dedicated carriage, distribution center management, transportation management, lead logistics, freight brokerage and supply chain consulting. Market-leading companies around the globe rely on Penske Logistics to manage and optimize their supply chains every day.

Visit www.PenskeLogistics.com or call 1-800-529-6531 for more information.

Infosys
Infosys is a global leader in technology services and consulting. We enable clients in 45 countries to create and execute strategies for their digital transformation. From engineering to application development, knowledge management and business process management, we help our clients find the right problems to solve, and to solve these effectively. Our team of 198,000+ innovators, across the globe, is differentiated by the imagination, knowledge and experience, across industries and technologies that we bring to every project we undertake.

Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise thrive in the digital age.

Korn Ferry
Korn Ferry is the preeminent global people and organizational advisory firm. It helps leaders, organizations and societies succeed by releasing the full power and potential of people. More than 7,000 colleagues deliver services through the firm's Executive Search, Hay Group and Futurestep divisions. Visit kornferry.com for more information.

Penn State University
Penn State is designated as the sole land grant institution of the Commonwealth of Pennsylvania. The University's main campus is located in University Park, Pennsylvania. Penn State's Smeal College of Business is one of the largest business schools in the United States and is home to the Supply Chain & Information Systems (SC&IS) academic department, Center for Supply Chain Research (CSCR) and Penn State Executive Programs. With more than 30 faculty members and over 800 students, SC&IS is one of the largest and most respected academic concentrations of supply chain education and research in the world. SC&IS offers supply chain programs for every educational level, including undergraduate, graduate and doctorate degrees, in addition to a very popular online, 30-credit professional master's degree program in supply chain management. The supply chain educational portfolio also includes open enrollment, custom and certificate programs developed by Smeal's Penn State Executive Programs and CSCR, which helps to integrate Smeal into the broader business community. Along with executive education, CSCR focuses its efforts in research, benchmarking and corporate sponsorship. CSCR corporate sponsors direct the Center's research initiatives by identifying relevant supply chain issues that their organizations are experiencing in today's business environment. This process also helps to encourage Penn State researchers to advance the state of scholarship in the supply chain management field. Penn State's Smeal College of Business has the No. 1 undergraduate and graduate programs in supply chain management, according to the most current report from Gartner.

For more information, please visit www.smeal.psu.edu/scis and www.smeal.psu.edu/cscr.

SOURCE Penske Logistics

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