SCALA research finds only 18% of UK companies are satisfied with third-party logistics suppliers
According to new research from supply chain and logistics consultancy firm, SCALA, only 18% of UK companies are satisfied with their third-party logistics suppliers (3PLs). The survey, released this week, returned results from a selection of the UK’s best-known businesses and 3PLs with regards to customer satisfaction rates. Companies surveyed do business across a range of industries, but are primarily engaged in the grocery, FMCG, electrical appliance and homewares sectors.
The report discovered the existence of significant discrepancies between the satisfaction levels 3PL customers have with their third-party Logistics suppliers, and the perceived satisfaction rates of the 3PLs themselves. Common satisfaction pain points for businesses included a lack of proactivity from 3PLs, a lack of continuous improvement and a constant focus on cost instead of quality. 3PLs on the other hand, largely believed their clients were “very satisfied” with their services.
John Perry, managing director at SCALA, commented: “Two things are clear from this research. Firstly, customers of 3PLs need to be more vigilant in their approach to tendering, awarding and managing their 3PL contracts. Secondly, 3PLs should be doing more to increase satisfaction levels amongst their customers and identifying better ways to accurately gauge the state of their customer relationships.
“The key to achieving better synchronisation between 3PLs and their customers lies first and foremost in ensuring customers and 3PLs are aligned to successfully achieving the customer’s key business objectives. Once a contract is awarded, this then needs to be implemented through regular, formal review meetings, that look at objective measures of performance both of those business objectives and the detailed SLA logistics performance measures that are effectively communicated between both parties. Too often, KPIs are set at the outset and then consigned to a bottom drawer.
“Without reference to these measures of success, perspectives become based on informal discussions, hearsay and personal bias. KPIs provide both sides with the rare opportunity to step back and review the situation calmly and clearly. These also provide early indicators of when slight changes are needed to keep the relationship on track.
“These formal reviews are also an opportunity to review changes in business requirements and profile and for 3PLs to proactively suggest improvements and innovations that deliver on their expertise and added value.
“Bringing in external advisors can bring independent objective expertise to help businesses on both sides gauge the state of a partnership, outline any discrepancies and iron out pain points. While most companies go through tender processes perhaps every five years, with little experience beyond their own 3PL relationship, external advisors are constantly involved in the fruition of new partnerships and as such can offer key insight into how relationships should be upheld.”
Uber Freight to Acquire Transplace in $2.2bn Deal
Uber Freight is to acquire logistics technology and solutions provider Transplace in a deal worth $2.25bn.
The company will pay up to $750m in common stock and the remainder in cash to TPG Capital, Transplace’s private equity owner, pending regulatory approval and closing conditions.
“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, Head of Uber Freight, and former founder of the Uber-owned trucking start-up Otto.
Uber’s Big Play for Supply Chain
Transplace is one of the world's largest managed transportation and logistics networks, with 62,000 unique users on its platform and $11bn in freight under management. It offers truck brokerage and other capacity solutions, end-to-end visibility on cross border shipments, and a suite of digital solutions and consultancy services.
The purchase is the latest move by parent company Uber, which launched as a San Francisco cab-hailing app in 2011, to diversify its offering and create new revenue streams in all transport segments.
Transplace said the takeover comes amid a period of “accelerated transformation in logistics”, where globalisation, shipping and transport disruption, and widespread volatility are colliding.
Uber Freight plans to integrate the Transplace network into its own platform, which connects shippers and carriers in a dashboard that mirroring the intuitive experience found in its consumer vehicle booking and food ordering services.
“This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most,” said Ron.
Frank McGuigan, CEO of Transplace, said the resulting merger will offer enhanced efficiency and transparency for shippers, and benefits of scale for carriers. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment,” he added.
History of Uber Freight
Uber Freight was established in 2017 and separated into its own business unit the following year. In 2019 the company had expanded across the entire continental US, established a headquarters in Chicago. Later that year it launched its first international division in Europe, initially from a regional foothold in the Nertherlands, and later moving into Germany.
The logistics spinoff attracted a $500m investment from New York-based Greenbriar Equity Group in October 2020, and launched a new shipping platform for companies of all sizes in May, partly in response to a driver shortage in Canada.