A fifth of UK companies have reported an unsuccessful start to contracts with their third-party logistics providers (3PLs), according to the latest research from leading supply chain and logistics consultancy, SCALA.
The research looked at contract start-ups and found that 15% of customer companies have experienced a service that was below expectation in terms of either cost, deliverables or timing issues. Meanwhile, 5% said the relationship was poor and they experienced major problems.
SCALA surveyed a selection of the UK’s best-known businesses and 3PLs (whose revenue runs into the billions and whose number of clients run into the thousands) to ascertain companies’ satisfaction rates and areas of concern regarding the performance of their 3PLs.
3PLs showed an overly optimistic view of their performance, with 54% rating their contract start-ups as highly successful – on time, to budget and no service disruption – when compared to just 35% of customer companies with the same opinion.
John Perry, managing director at SCALA, commented: “These findings show that more work needs to be done to ensure 3PL contracts can be a success from the start.
“From reviewing the results, there is a clear tendency for the blame game to start during crucial periods like the start of a new contract. Rather than trying to point the finger, both parties need to work on the ‘partnership’ for relationships to succeed. Communication and collaboration need to be high on both sides.
“At our recent Annual Supply Chain Debate, attended by over 150 industry professionals, the main discussion was around how both customer organisations and 3PLs should communicate better from the outset. Customers should ensure they pick 3PLs that are a good cultural fit for their organisation so they are aligned to the same values and goals. Procurement strategies should also be less prescriptive so 3PLs can deliver more and be truly embedded within the business.”