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3PL Outsourcing

Are 3PL Services a Commodity?

Kane Logistics | August 23, 2013

Are 3PL Services a Commodity?

Are 3PL services a commodity?  Some are and some aren't.  The key is how these services are perceived by shippers who purchase 3PL services.   

If you cannot differentiate your services in the 3PL space, you will quickly be labeled a commodity.  Buyers today are more educated than ever before on 3PL services and cost structure.  As a result, some approach buying 3PL services in the same way they approach buying paper clips. 

How much do I get and what is the price?

If the value created for the shipper is perceived as the same across 3PLs, then price is always considered the top criterion in the purchasing process.  The challenge for 3PLs is to create a value proposition that is seen by shippers as being truly unique and capable of driving measurable improvements in supply chain performance.     

3PLs can demonstrate a strong value proposition in many ways… the introduction of innovative solutions, the application of best practices to an inefficient operation, flawless execution, or maybe offering a proactive, customer-first business relationship.

The key to success lies in the ability to break out of the commodity mindset and be an innovator to create value.