In 2021, Accenture conducted a survey of more than 800 global logistics executives to better understand their challenges, capabilities and strategies for growth. The report was titled Logistics: Full Service. Full Stop. Below is the list of the salient points they found, all of which reinforce Nucleus' understanding of what customers are looking for from logistics providers.
According to the research, nine out of ten logistics companies believe their customers want them to offer a broader set of logistics services.
This will mean either extending their service portfolios to include upstream and downstream solutions or expanding their existing services across more geographies, industries or modes of transport.
91% of logistics companies acknowledge that customers are now asking for end-to-end logistics services handled by a single provider.
The reasons for this are heightened volatility, changing customer demand and behavior, and lastly, growing competition.
“ Many shippers are unsatisfied with third-party logistics (3PL) services. Hence, many of them are either engaging fourth-party logistics (4PL) providers or are building their own capabilities. This is a danger sign for 3PLs.”- Senior Executive of a major 3PL
43% of logistics companies strongly fear becoming a takeover target if they don’t proactively invest in expanding their offerings portfolio.
Customers are eager to partner with logistics companies that can share information, analyses and industry insights that could make them more resilient.
Multiple experts cited the need for service consistency, flexibility and responsiveness to create more satisfying customer experiences.
47% of logistics companies are strongly focused on aligning their purpose to customers’ values for sustainable business operations.
Logistics companies have no choice but to change. They must become more responsive, more reliable, and more agile and resilient in the face of market volatility and competitive threats.
They can do this through vertical or horizontal integration.
Vertical integration involves transitioning into a one-stop logistics provider or, at a minimum, a provider that offers an expanded array of services to meet more of their customer's needs across the value chain. 48% of logistics companies are pursuing vertical integration strategies to become end-to‑end service providers.
Horizontal integration focuses on expanding current offerings in the same domain, in effect doubling down on the service areas that offer the greatest competitive advantage.
Customers have asked for personalized, end-to-end logistics services—a demand that has only been amplified by events of the last two years.
Those that don’t expand their reach and offerings will likely find it hard to survive in the more competitive and disruptive environment of the future.
This research echoes what Nucleus has found our customers wanting and needing from a logistics provider. It also reinforces the inevitable trend toward Supply Chain as a Service(SCaaS). And that trend is why we are a 4PL SCaaS provider. Our executives came from 3PL service providers over two decades ago and found this business model because it is what customers needed then. And even more so now.
Source: Accenture
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