Logistics Leaders Into Outsourcing

Logistics Leaders Into Outsourcing

Outsourcing logistics services has become common—85% of logistics leaders expect their outsourcing budget to increase by more than 5% in 2020; 85% reported a similar budget increase in 2019, finds Gartner’s 2019 Logistics Outsourcing Strategy survey.

One reason leaders expect budgets to increase is that logistics outsourcing supports their business objectives. About 70% of respondents say they have met or exceeded functional, end-to-end supply chain and overall business goals with the help of logistics outsourcing, such as third-party logistics (3PL) providers.

Although the majority of logistics leaders view outsourcing as beneficial to their business, risks and challenges remain. The complexity of working with multiple partners is their biggest concern, followed by cybersecurity and the incompatibility of information systems between different 3PLs and their organization.

Nearly half of those surveyed say that updating technology systems, increasing speed to customers, and improving visibility are their most important goals for 2020. To be effective, logistics outsourcing strategies need to align with overall logistics priorities.

“To respond to these accelerated and evocative changes, logistics leaders need to understand the foundational elements of good overall strategy, and rethink how they assess and develop logistics outsourcing strategy,” says Courtney Rogerson, senior principal analyst with the Gartner supply chain practice.