3PLs
strategicinsight

I HAVE BEEN CONDUCTING RESEARCH INTO THE THIRD-PARTY LOGIStics (3PL) industry for nearly 25 years. For the last 20 years, I have done three annual regional surveys of the chief executive officers (CEOs) of many of the largest 3PLs in North America, Europe, and the Asia-Pacific region. Each year, I ask those surveyed to identify the most significant problems faced by their companies in those markets. Most years “finding and keeping talented managers” ranks among the top three problems in each of those regions. It is also typically ranked as one of the most significant market dynamics in each regional survey.

As we’ll explore below, there are a number of reasons why talent recruitment and retention has become such a widespread problem for 3PLs. If third-party providers are to maintain their value proposition—that their knowledge and experience are the source of the improvements they wring from a customer’s supply chain—then the need to solve the talent problem is not only urgent but perhaps a matter of survival. To assure a bright future, 3PLs must be competitive across multiple dimensions when it comes to hiring, and they must try to understand what new employees are looking for in an employer.

A MULTIFACETED PROBLEM

Our annual surveys have addressed the issue of talent recruitment and retention many times throughout the years, and we have gathered substantial data on the topic. We continued to do so in our 2013 surveys. First, we asked the CEOs of 25 large multinational 3PLs why, in their experience, this continues to be such a significant problem in the industry. They identified a number of possible reasons, which can be clustered into several areas. First, large 3PLs find themselves competing for supply chain and logistics management talent with manufacturers, retailers, other 3PLs, consulting firms, and other service-sector organizations. It’s a very competitive market and the talent pool, particularly at the entry level, is not sufficient to meet the industry’s needs. There is much greater demand than supply, particularly in emerging markets.

Second, according to the CEOs, the initial opportunities for supply chain and logistics management professionals in other industries are often perceived to be more attractive than those in the 3PL industry. Several observed that 3PL com-

This story first appeared in the Quarter 3/2013 edition of

CSCMP’s Supply Chain Quarterly, a journal of thought leadership for the supply chain management profession and a sister publication to AGiLE Business Media’s DC VELOCITY.

Readers can obtain a subscription by joining the Council of Supply Chain Management Professionals (whose membership dues include the Quarterly’s subscription fee). Subscriptions are also available to non-members for $89 a year (print) or $34.95 (digital). For more information, visit www.SupplyChainQuarterly.com.