June 13, 2017 | Industry Insights

Good News: Shippers Increasingly Relying on 3PLs for Logistics & Supply Chain Services

Share This:
Featured Image

Supply chain consulting firm Armstrong & Associates released its report, “Trends in 3PL/Customer Relationships – 2017,” indicating that 90% of domestic Fortune 500 companies rely on third-party logistics providers (3PL) for outsourced logistics and supply chain services. Armstrong & Associates has been tracking these 3PL-customer relationships for more than a decade. The report findings are based on analysis of more than 7,200 current 3PL customer-relationships in 41 countries—representing nearly 20,000 services.

The report’s key findings, as outlined by online publication, Supply Chain 24/7, are as follows:

  • Fortune 1,000 3PL revenues, which, at $132.8 billion, account for just under 80% of the U.S. 3PL market
  • 2016 3PL revenues for the retailing and technological industries are $32.4 billion and $30.6 billion, respectively
  • Global Fortune 500 3PL revenues, at $273.8 billion in 2016, were paced by the technological and automotive industries, accounting for $77.2 billion and $52.5 billion, respectively

According to the report, its finding that 90% of Domestic Fortune 500 companies worked with at least one 3PL represents a significant increase from 2001, which was at a low of 46%, when Armstrong first began tracking this data. This increase in turning to 3PLs for services, the report says, reflects the need for shippers to control costs and increase supply chain efficiency. Moreover, the larger the shipping company, the more likely it will have at least one relationship with a third-party logistics provider.

Armstrong & Associates expects 3PLs to continue to expand their footprint in the market based on their findings, including in providing additional services to e-commerce shippers in the B2C market.

Making Sure 3PLs Are Properly Covered

As the demand for 3PL companies grows, making sure proper insurance coverage is in place is critical in protecting against the various risks inherent as a result of the various services provided. 3PL companies can provide outsourced logistics services to clients for part, or all, of their supply chain management functions. A nimble and comprehensive insurance program, particularly as the reliance on technology increases, should be secured to cover the broad spectrum of 3PLs – from brokers and freight forwarders to rail transporters, consolidators, shippers and air cargo agents. Coverage, depending on the 3PL’s operation and services, can include Marine Cargo, Motor Truck Cargo, Transportation Liability, Warehouse Legal Liability, Packer’s Legal Liability, Contingent Cargo, Errors & Omissions Liability and Cyber Liability, among many other insurance policies.

Roanoke Trade specializes in insuring third-party logistics providers, offering end-to-end insurance solutions that are tailored to your specific exposures. For information about our insurance products and services, please contact one of our Roanoke Trade professionals at 1-800-ROANOKE (800-762-6653).

Share This:

Related


Is your Business Exposed to the Risks of Employee Distracted Driving?

The National Safety Council(NSC) recognizes April as Distracted Driving Awareness Month. They estimate that 4,000 deaths and 276,000 injuries occur yearly because of distracted driving crashes. Additionally, distracted driving is the cause of 10% of all fatal crashes. Many of these accidents and fatalities are attributed to drivers engaging in risky behavior such as cell phone use, eating/drinking, reaching for an object, talking to a passenger or reading GPS. Not wearing seatbelts, speeding and use of alcohol makes these accidents much worse. Additionally, the stressors of the pandemic, returning to work, and other social factors have increased the cognitive distraction […]

Commercial Business Insurance, Industry Insights

Guarding Against Fictitious Pickups and Cargo Theft: Tips and Training

Fictitious pickups are increasing in North America. In the US, the percentage of cargo thefts due to fictitious pickup rose from 1% in 2022 to 17% in 2023. Strategic theft patterns are also rising, where thieves use identity theft and fraud with fictitious pickup and brokering schemes to obtain loads from freight locations. Combatting this menace requires a combination of vigilance, technology, and a well-trained staff. Let’s explore some effective strategies for guarding against fictitious pickups and minimizing the risk of falling victim to scams. Per Tony Pelli, Practice Director, BSI Consulting, Specializing in Supply Chain and Security Risk Management, […]

Cargo Insurance, Industry Insights

Unlocking Success: The Key Elements of Carrier Vetting and Managing Liability

By: Andrew Johnson, Account Executive, Roanoke Insurance Group Inc. The freight brokerage industry as we know it today began in the late 1970s and early 1980s, around the time of the Motor Carrier Act of 1980. Before the passage of this landmark legislation, regulations were too restrictive to make freight brokerage a viable business segment. Fast-forward to today, and most motor carriers, by authority definition, also have a freight brokerage operation. Freight brokerages fulfill a vital service in modern logistics, connecting independent carriers with loads and drastically reducing empty repositioning moves. Brokering also allows carriers to complement their assets by […]

Industry Insights

Roanoke is the leading provider of insurance and surety solutions for transportation and logistics providers. In fact, we are recognized as the most reliable source for U.S. customs bonds.

Contact

If you have any questions or need help, feel free to contact with our team.

800-762-6653
US Flag

US CORPORATE HEADQUARTERS

1501 E. Woodfield Road

Suite 400W

Schaumburg, IL 60173


Canada Flag

CANADA CORPORATE HEADQUARTERS

390 Bay Street

Munich Re Centre, 22nd Floor

Toronto, ON M5H 2Y2

Solutions that Go the Distance.

© 2024 Roanoke Insurance Group Inc.

Better Business Bureau logoCoverholder at Lloyd's logo