3PL Growth Strategy

Purpose: Define a strategy for competitive advantage and profitable growth

The third-party logistics (3PL) industry has become highly competitive due to rapid technological innovation, the rise of e-commerce, and increasingly demanding customer expectations. Globalization and market consolidation have also intensified pressure on providers to improve efficiency and broaden their services.

3PL is a challenging competitive market, especially for mid-market companies. It is important to adopt leading industry practices and develop a niche strategy for growth, profitability, and sustainability.

3PLs want to know “how they stack up” against other 3PLs and define a growth strategy based on service and technology requirements and insight on market conditions and opportunities.

Approach: Create a comprehensive baseline for comparison to industry practices and market dynamics

Current State Assessment: The methodology is extensive. It starts with baseline evaluation, including on-site visits, management interviews, and data collection. 3PLR will dig into the details of process, people, and technology, customers, and financial performance for comparison to industry practices and market dynamics.

3PL Service Portfolio & Growth Strategy
Facilities Locations & Functional Profiles
Organizational Structure
Financial Results & Objectives
Go-to-Market Strategy & Sales Promotion
- Key Customer Relationships & Industries
- Sales Pipeline & RFP/Bid Process
- Pricing & Costing Methods
- Sales Compensation Program
Warehousing & Value-Added Service & Capabilities
Domestic & International Transportation Service & Capabilities
Trucking Assets, Modes, & Key Lanes
IT Systems & Development Strategy
Operational & Customer Delivery KPIs
Continuous Improvement Program

Approach: Compare the baseline to industry and market factors using SWOT Analysis

Industry Practices & Market Dynamics: Leverage knowledge of 3PL industry practices and market dynamics based on years working with 3PLs and Armstrong & Associates’ market research to organize the baseline into a competitive framework using SWOT Analysis.

Global and Domestic Logistics Costs and 3PL Revenue Trends
Growth Trends Across 3PL Market / Service Segments
3PL / Customer Trends Driving Demand
3PL Vertical Industry and Sub Segment Market Sizes
Warehousing Pricing and Profitability Benchmarks
Digitalization Trends in Domestic Transportation Management
DTM / Freight Brokerage Competitive Benchmarks
Peer Group Competitive Analysis
Merger and Acquisition Transaction History

Deliverable: Future state roadmap with specific actions to shore up gaps and position for growth

SWOT Analysis & Solution Options: SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis is an effective framework for comparison and defining solution options for key decision-making toward a 3PL growth strategy.

SWOT Analysis yields specific recommendations for management discussion and decision-making to advance service capabilities, market strategy, functional operations, organizational design, sales promotion, and enabling IT systems to define a practical and achievable growth strategy. Aspects of the strategy and roadmap includes . . .

3PL Growth Areas
Optimal Service Portfolio
Organization / Business Model for Profitable Growth
Operational Performance Goals / Metrics
Growth and Profitability Forecasts
Target Vertical Industries and Customers
Sales and Marketing Approach and External Messaging
Pipeline / Customer Relationship Management
Current Geographic Footprint and Positioning
Digitalization/Automation Strategy for Growth and Increased Profitability
Leveraging Mergers and Acquisitions for Growth

Ready to optimize your strategy?

Contact 3PLR or schedule a call to discuss your company’s needs and find the right solution to optimize your operations.

Case Studies

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.

3PL Growth Strategy | Case Study 2

3PL Start-Up Growth Strategy – A small $10M VAWD 3PL with 2 warehouses in SoCal had an ambitious revenue goal to grow by 3X in 3 years. It sought help to figure out how to achieve it. The 3PL originally operated as the logistics department of the parent company but started to offer 3PL VAWD services to a handful of small apparel companies. Very small but highly profitable, it had developed solid and marketable VAWD capabilities and made smart choices in IT systems selection.