Today the Georgia Institute of Technology and Capgemini released the results of their 10th Annual Third Party Logistics Study.
The most surprising information that came out of the report is that for the first time in the survey’s ten year history, price has overtaken value-added services becoming the most important attribute in selecting a 3PL provider.
I see these results as a disturbing trend and a very misguided way to go into the 3PL selection process. While there is more pressure than ever before for companies to run lean supply chains, I think that when dealing with the third party logistics industry going with the lowest cost provider is almost always going to come back to bite you in the ass.
You can find logistics services out there for rock bottom prices. That is a fact. And I don’t want to be cliche about it but there really is alot of truth to the old adage, “You get what you pay for.” Sure you’re paying a much lower per pallet and handling charge, but when your supply chain is plagued with missed shipments, poorly picked orders, and your logistics provider’s technology offerings amount to counting your inventory with an abacus did you really save anything?