Seventy-seven percent of Domestic Fortune 500 companies use 3PLs for logistics and supply chain functions according to a new report just issued by Armstrong & Associates. The report ‘Trends in 3PL/Customer Relationships -’ 2009’ leverages Armstrong & Associates’ proprietary database of 3,936 3PL customer relationships and provides detailed information on the top outsourcers to 3PLs, service demand and 3PL market size by vertical industry segment from 2005 through 2008.
According to the report, General Motors, Procter & Gamble, Wal-Mart, PepsiCo, and Ford Motor each use 30 or more 3PLs. The report also quantifies the Global Fortune 500 3PL market at $187.4 billion for 2007 with growth to $199.7 billion in 2008. ‘Within the Global 500, ‘Technological’ vertical industry 3PL customers spent over $45 billion with 3PLs in 2007 and 2008. ‘Electronics, Electrical Equipment’ companies led all Technological vertical sub segments with over $18 billion in 3PL spend.
The average customer is utilizing each 3PL for three distinct services.’ Of the total 3,936 3PL/Customer relationships, 728 or 18.5% are strategic with the 3PLs performing supply chain management and/or lead logistics provider services. The remaining 81.5% can be classified as tactical relationships. The most important services by vertical industry are also highlighted.
Commenting on the report, Evan Armstrong, president of Armstrong & Associates said, ‘This year’s analysis of customer relationships is our best to date and builds upon our previous reports.’ For the first’ time we have included vertical industry 3PL spend estimates for years 2005 through 2008. We have also expanded our vertical industry sub segment analysis. The report breaks down elements, technology, retailing and other verticals into their sub segments.’