July 2021 | Commentary | Checking In

Catch Me When I Fall

Tags: 3PL, Partnership, Third-Party Logistics

Keith Biondo is the publisher of Inbound Logistics magazine.

A trust fall is a team-building exercise where the one doing the falling willingly trusts that those standing behind will catch them before they hit bottom.

We chose the trust fall as an apt theme for our annual third-party logistics edition. Whether you voluntarily fall or are shoved by business realities—pandemic, labor shortages, remote workforces, supply scarcity, mercurial price increases, inflation, the surprise consumption explosion—the question is the same: Who has your back? Does anyone?

The answer for more enterprises this past year was to turn to a trusted third-party logistics partner and many took the trust fall for the first time. A full 84% of 3PLs responding to our annual market research study report that new customer acquisition was up significantly year over year. In fact, several respondents say new customer sign ups totaled more than 30% for the year.

Respondents also report that sales of new solutions to customers were up more than 88% year over year. Clearly, this past year caused many more companies to search for, engage with, and trust a logistics partner as a panacea for pandemic pain.

Trust Fail

For the past 20 years, companies have refined their sourcing, purchasing, and supply chain operations to be extremely efficient, satisfactorily serving customers with fast-moving lower inventory levels, relying on partners to keep steady inbound product supply in place. Supporting those models were transportation networks that consistently performed with a proven measure of reliability.

It's not for lack of trying, and sometimes heroic efforts by carriers and other key players fighting friction outside of their control, but trust in the reliability of global transport networks is largely broken. It follows that the best technology, and the most perfect plans driving finely tuned inventory regimes, is in shambles for many. Restoring that trust will take the best efforts of key players and time—a lot of time.

The first marker on the road to recovery is a sign that reads: Resiliency. "Successful companies today—and in the years ahead—will redesign their operations and their supply chains to protect against a wider and more acute range of potential shocks and disruptive events," according to a timely McKinsey & Company study. More than 40% of respondents to that study say their ability to compete globally is damaged.

Given the interconnected nature of global supply chains, going it alone is not an option for some. As a result, more companies trust 3PLs to help provide operational resiliency in the face of disruption and catch them should they fall.






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