What changes are in store for the 3PL sector?

The 3PL industry has flourished for over 25 years in providing non-asset services. However, in the near future the focus of 3PLs is likely to shift to having assets. That’s a major shift. To prepare for it, let’s take a look at where 3PLs have been.

Historically, the traditional 3PL provider’s only asset was its balance sheet. The 3PL was an existing non-vessel operating common carrier (NVOCC) already providing ocean services on the import side of the equation.  The NVOCC provided ocean services through contracts with the steamship lines.

During the late ‘80s and early ‘90s, the theory of supply chain started to be developed into defined synergies that would address such issues as product throughput, inventory control and cash management. Traditionally, the shipping community directed most of its decisions on rates and services through its purchasing departments. Fragmented decisions were usually decided by the lowest cost or price with companies’ different operating silos. Business awards were made through a simple request for quotation, usually the lowest price. Integrators carried a majority of international air freight and domestic deliveries. Integrators owned and operated their assets and had dominance that could be focused on particular clients.

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