3PL Growth Strategy | Case Study 1

Business Case for 3PL Start-Up with Financial Projections - An $8.8B global contract electronics manufacturer imagined an opportunity to grow revenue and expand customer “share of wallet” by establishing 3PL services. The core business had a remarkable stable of marquee names in the Technological vertical to also sell 3PL services. However, the intended 3PL business must achieve a level of profitability and ROIC commensurate or better than the core business to gain leadership approval.

3PLR’s analysis started with estimates of logistics costs controlled by customers and other 3PLs as potential 3PL revenue. The scope included warehousing, domestic and international transportation management. Thorough evaluation of logistics service capabilities and operations, network assets, IT systems, and customer relationships, compared to 3PL requirements and market research, revealed significant revenue potential by increasing "share of wallet" with logistics services and gaps for investment.

Final deliverables included a proposed 3PL service portfolio and organizational structure, SWOT Analysis of market potential, operational and IT systems gaps, 7-year revenue projections by 3PL segment, estimates of ROIC and EBIAT impact, competitive benchmarks, market positioning strategy, and an implementation roadmap. Forecast ROIC exceeded that of the core business. Executive leadership signed off on the plan and the client hired a senior leader to build and run the new 3PL division.