Use of third-party logistics services by large US manufacturers in 1997 and comparisons with previous years

Abstract

The use of third-party logistics services by large US manufacturers continues to grow. Increasingly, those services are used to support international sourcing and sales activities. Use of these services is often triggered by specific events such as a corporate restructuring, a top management change or a benchmarking effort. Nearly two-thirds of users report they experienced significant impediments in implementing third-party agreements. After starting conservatively, the typical user buys a wide variety of logistics services. Users generally report that buying logistics services has had a positive impact on their organizations, particularly with respect to logistics costs and customer service. However, many also report negative impact on employee morale linked to downsizing the logistics workforce. More than two-thirds of users report cancelling at least one-third-party logistics contract. Nevertheless, if given complete responsibility to make the decision, >70% of users would increase their companies' use of such services.