Recent Report Points towards Increasing Use of 3PL across Multiple Industries


A 2013 report issued by the globally recognized logistics consulting firm, Armstrong & Associates shows a positive trend in 3PL (Third-party logistics) service growth in various sectors.  The report uses data gathered from over 6,000 businesses Armstrong & Associates has built relationships with over the years and gives insights as to how outsourced 3PL companies are becoming a fixation on the global and domestic marketplace.

3PL Industtry On the Rise 

From 2005 to 2013 to-date data shows that globally, the 3PL market has increased at 67%.  In addition to global growth the report also sheds light on growth in the domestic market, even in the face of recession and on through recovery.  This is further quantified by data showing that 86% of Domestic Fortune 500 businesses employ 3PL companies for logistics and their various supply chain management needs.  Some companies mentioned included: General Motors, Procter & Gamble and Wal-Mart.  According to the report, on a global scale, the technology industry experienced remarkable growth in 3PL expenses, reaching upwards to $71.1 million in 2013, with electronics and electrical equipment leading the way.

A review of the report states that on average most 3PL customers are using third=party logistics to help manage products and inventory transportation.  They highlight a handful of well-known brands such as Nike and Cumnins, illustrating a diversified customer-base for third-party logistics.   

This may seem like an overly positive report; however, as markets expand it is no surprise to see a natural progression towards 3PL as more businesses seek to reduce costs by outsourcing logistics, transportation & warehousing and inventory management services.  They key to this trend most likely lay in the fact that companies small and large, in industries all over, are looking for ways to reduce overhead and increase efficiency.  Logistics, shipping and warehousing have been noted as areas that can help businesses save significant amounts of money and while focusing on improving other core functions.

Evidence is mounting in support of the claim that 3PL’s are a valuable resource in a constantly expanding, global market. Clearly instances such as the transformation of the word logistics into a buzzword by monolith providers like UPS gives even more credibility to statements such as these.  Where some providers have the capability to meet the needs of smaller operations by simply offering global to domestic transportation services, there are many 3PL companies that go beyond moving inventory to managing full-on supply chain processes.

Businesses are quickly levitating towards 3PL as a way to save money, become more efficient and work smarter.  As the industry grows, choosing the right 3PL provider can be challenging.  While the Armstrong & Associates report defines to this movement trending, make certain you are not the only one left in the room when 3PL exits the realm of trends and becomes a business standard for operation.