For many manufacturers and retailers, the past few years have changed what they expect from their logistics partners. Cost will always matter, but as supply chains come under sustained pressure from geopolitical instability, labour shortages, rising operating costs, climate risk and changing customer expectations, third-party logistics providers (3PLs) are increasingly being assessed on their ability to keep operations moving during disruption.
This was a central theme of SCALA’s 23rd Annual Supply Chain Debate, which brought together senior leaders from across retail, FMCG and logistics to discuss whether 3PLs are the real heroes of the supply chain.
The final audience poll suggested a clear industry consensus, with 59% of respondents saying 3PLs can be the heroes of the supply chain if they have skin in the game and are structured for success, rather than simply to avoid failure.
This finding exposes an industry which has moved beyond simple debates about outsourcing versus insourcing to more pressing questions of how customer and provider relationships are designed, measured and managed.
Reliability still comes first
One of the clearest findings from the debate was that, even in the age of artificial intelligence, automation and advanced analytics, service execution remains the first test of a 3PL relationship.
When asked what mattered most when evaluating a 3PL partner, 82% of attendees chose consistent, on-time and reliable service execution. Just 1% selected access to cutting-edge technology and AI-driven insight, while 8% selected lowest possible operational cost.
In other words, innovation matters, but it cannot compensate for poor collection performance, missed delivery windows, weak communication or a lack of contingency planning.
In road logistics, the technology that delivers most value will be the kind that strengthens the fundamentals, improving fleet availability, route discipline, yard efficiency, warehouse coordination and customer communication without adding unnecessary complexity.
The industry wants integration, but trust is still a barrier
The debate also highlighted a clear tension in customer-3PL relationships. On one hand, 65% of attendees said the primary role of a modern 3PL should be to act as an integrated extension of the business, and 90% said supply chain success should be owned through shared accountability. On the other hand, the biggest barriers to greater innovation were procurement’s focus on cost, cited by 29%, and lack of trust, cited by 27%.
This exposes a major industry issue, with businesses increasingly wanting their 3PLs to behave like part of their own operation, but many still being procured, contracted and managed as transactional supplier arrangements.
That is a key finding for transport providers, which are often the first to feel the impact when demand changes and are expected to flex capacity, protect service levels, manage peak pressure and respond to disruption, often without the commercial structure needed to make it sustainable.
If businesses want 3PLs to operate as an extension of their own organisation, they need to treat them as part of the planning process, rather than a delivery mechanism once decisions have already been made.
What businesses should do before entering new partnerships
For businesses beginning a new 3PL or transport partnership, the debate findings point to several practical lessons.
The first is to define the operational outcome before starting procurement. Too many tenders begin with a specification built around current activity, then ask providers to price against it. A better starting point is to clarify what the business needs the partnership to achieve. That could be improved service resilience, lower cost-to-serve, better peak readiness, faster delivery, lower carbon impact, stronger regional coverage or more flexible capacity.
The second is to put reliability and quality service performance at the centre of the contract. For road transport, that means agreeing clear measures around on-time collection and delivery, vehicle utilisation, safety performance and communication standards. The contract should also define what happens when volumes move outside agreed thresholds.
The third is to build shared accountability into the operating model. If supply chain success is shared, governance needs to reflect that. Customers and 3PLs should agree on regular feedback forums to discuss improvement and risk, rather than relying on quarterly reviews that only look backwards.
Finally, both sides should treat innovation as a continuous operational discipline. For most businesses, the biggest improvements will come from continuous improvement, be that in network design, smarter use of shared-user capacity, reduced empty running, or introducing technology that supports rather than complicates operations.
The debate showed that 3PLs can play a much more strategic role in modern supply chains if given the visibility, trust, commercial structure and accountability to operate in that way. For manufacturers, retailers and transport operators alike, open and effective collaboration is where the next stage of supply chain improvement will need to begin.
Chris Clowes, executive director at global supply chain and logistics consultancy, SCALA
