Over the last year, the logistics market has seen a large number of acquisitions involving third-party logistics providers (3PLs). ARC research indicates that, cumulatively, these acquisitions involve companies that have over 40 percent of the total Managed Transportation Services (MTS) market. This makes it increasingly challenging for shippers to select a 3PL with the appropriate characteristics and capabilities for their particular requirements. To enable shippers to do so in an informed, impartial, fact-based manner, ARC Advisory Group now offers a Managed Transportation Services Supplier Selection Guide. Unlike previous offerings in the logistics space, this ARC Selection Guide focuses specifically on managed transportation as a distinct service line.
Managed transportation is not the largest service line for most 3PLs. If these 3PLs are acquired, there is no guarantee that the acquiring company will value the MTS business as much as the former owners. There are past examples of 3PLs with MTS practices seeing that business diminish, or even go away entirely within a few years of an acquisition. Selecting an appropriate MTS provider to work with has become more difficult and risky.
In a managed transportation service arrangement, a shipper contracts with a third party to plan and execute its logistics moves. In other words, instead of having internal planners plan and execute moves, those planners are employed by the MTS supplier, but work on the shipper’s behalf.
The primary driver for an MTS engagement is the recognition that man-aging transportation is not a core competence for the company. MTS relationships are generally successful. Two-thirds of respondents to ARC Advisory Group’s managed transportation services survey reported that they achieved freight savings based upon their MTS relationship. Many achieved quite substantial savings. Significantly, the freight savings did not come at the expense of diminished service levels to customers. From a service perspective, MTS represents a low-risk engagement. The selection guide reviews our research on the ROI companies can expect when they engage in an MTS arrangement, as well as what factors are linked to successful engagements.
This guide is designed to speed the supplier selection process. Over 150 criteria are provided that can be used in selecting a supplier.
The guide also provides data on who the leaders in the market are, and which 3PLs are the leading providers in different regions of the world and a variety of different industries. Supplier profiles are provided on all prominent suppliers of managed transportation services.
The decision of which MTS supplier to work with is a critical decision. It must be made with care, using an impartial, fact-based approach. Most supply chain professionals are very busy and have more to do, than time in the day to do it. The individuals on the selection team will find that this guide to be a very good investment that greatly reduces the time and effort required choose the most appropriate service provider for their business.
For more information on this report, please visit our Technology Evaluation and Selection section.