Keywords: Managed Transportation Services, Shippers, Third-Party Logistics Service Providers
Managed transportation services (MTS) involves a shipper contracting with a third-party logistics (3PL) service provider to both plan and execute the shipper’s transportation requirements. The worldwide market for managed transportation services has witnessed consistent growth in previous years and is expected to continue at the same pace next year, according to a new MTS study by ARC Advisory Group.
“Managed transportation is a low-risk engagement for shippers and one of the more profitable service offerings that a 3PL can provide. This is attracting new entrants to the market. MTS relationships also generally benefit the shipper, both in terms of substantial savings and the service levels received,” according to SCM Service Director Steve Banker, the principal author of ARC’s “Managed Transportation Services Global Market Research Study”.
Higher Profit Margins
MTS is more profitable than many other service lines offered by 3PLs, making it more likely for 3PLs to invest in this segment. In general, the financial marketplace favors asset-light business models – like MTS, brokerage, and freight forwarding – more highly than asset-based models. In addition, new SaaS-based transportation management systems make it easier and more cost-effective for the 3PLs to provide the managed transportation services.
Increased Focus on Achieving Growth in High-Growth Nations
Multinationals have been focusing their growth efforts on nations like China, India, and Brazil for several years. Planning and executing transportation in these nations is highly complex. Global 3PLs providing MTS in these nations will continue to experience robust growth rates.
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