Executive Briefings

Use of 3PLs by Fortune 500 Companies Remains Strong, According to Armstrong & Associates

One thing the recession hasn't hurt, it seems, is the use of logistics service providers by major businesses. According to a new report by Armstrong & Associates, 77 percent of domestic Fortune 500 companies are using third-party logistics players for logistics and supply chain functions. Drawing on a database of more than 3,900 3PL customer relationships, Armstrong finds widespread reliance on outsourcing by some of the nation's largest companies. General Motors, Procter & Gamble, Wal-Mart, PepsiCo and Ford Motor Co. each use 30 or more 3PLs. Services provided to the average customer fall into three distinct categories: supply chain manager and lead logistics provider on the strategic end, accounting for 18.5 percent of the companies surveyed, and tactical relationships, which make up the remaining 81.5 percent.

For the first time, the annual report includes spend estimates relating to specific industries, for the years 2005 through 2008. It also drills down into sub-segments of the various verticals. Looking beyond U.S. borders, Armstrong estimates the value of the global Fortune 500 3PL market in 2008 at $199.7bn, up from $187.4bn in the prior year. Global 500 customers in the technology sector alone spent more than $45bn on 3PLs in 2007 and 2008. Among sub-segments of that industry, companies involved in electronics and electrical equipment led all others in 3PL spend, topping $18bn.

Visit www.3PLogistics.com

One thing the recession hasn't hurt, it seems, is the use of logistics service providers by major businesses. According to a new report by Armstrong & Associates, 77 percent of domestic Fortune 500 companies are using third-party logistics players for logistics and supply chain functions. Drawing on a database of more than 3,900 3PL customer relationships, Armstrong finds widespread reliance on outsourcing by some of the nation's largest companies. General Motors, Procter & Gamble, Wal-Mart, PepsiCo and Ford Motor Co. each use 30 or more 3PLs. Services provided to the average customer fall into three distinct categories: supply chain manager and lead logistics provider on the strategic end, accounting for 18.5 percent of the companies surveyed, and tactical relationships, which make up the remaining 81.5 percent.

For the first time, the annual report includes spend estimates relating to specific industries, for the years 2005 through 2008. It also drills down into sub-segments of the various verticals. Looking beyond U.S. borders, Armstrong estimates the value of the global Fortune 500 3PL market in 2008 at $199.7bn, up from $187.4bn in the prior year. Global 500 customers in the technology sector alone spent more than $45bn on 3PLs in 2007 and 2008. Among sub-segments of that industry, companies involved in electronics and electrical equipment led all others in 3PL spend, topping $18bn.

Visit www.3PLogistics.com