Is Managed Transportation the Fastest Growing 3PL Service Line?
In a managed transportation service (MTS) arrangement, a shipper contracts with a third party to plan and execute their moves for them. In other words, instead of the shipper having internal planners plan and execute moves, those planners are employed by the MTS supplier, but work on the shipper’s behalf. In this report, market shares and market size are based on the management fees and gainshare arrangements associated with the Freight Under Management.
Some analysts covering the 3PL market are reporting the organic growth in the 3PL market is less than 1 percent. Many large 3PLs are only able to show growth based upon acquisitions. In contrast, the growth in the managed transportation market is much higher.
Growth in this market is driven by a variety of factors: a robust ROI associated with managed transportation arrangements, a decision by shippers to focus on their core competencies and outsource activities that are not core, an improved ability on the part of 3PLs to serve smaller shippers, and several other factors as well.
But there are shippers that are reluctant to embrace managed transportation. Among some, there is the fear that service level failures could put their business at risk. Others have decided to improve transportation operations by implementing a transportation management system.
Managed Transportation Services Strategic Issues
Managed Transportation Market TrendsDifferent suppliers approach this market in very different ways. Indeed, there are very different business models:
Are different strategies required for 3PLs based on their business model for managed transportation services?
How is newer, real-time visibility technology impacting this market?
How will new Uber style freight solutions impact this market?
Which suppliers are capable of global solutions, rather than regional ones?
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