An overwhelming 92% of retailers claim to be happy with their current third-party logistics providers (3PLs) — yet nearly half (49%) plan to change 3PLs in the next three years. That’s a key finding of a recent survey of 150 retailers conducted by Supply Chain Dive’s studioID and WSI, a leading provider of third-party logistics solutions.

When the time comes, retailers often don’t follow through on such assertions. But these results reflect widespread frustration with the gap between what retailers want from their 3PLs, and what they’re actually getting. 

“Retailers can and should expect more from their logistics partners,” says David Basic, vice president of sales at WSI. “After all, order fulfillment is one of the last and most important touchpoints of the customer journey. A 3PL should be adding value at every stage and acting as an extension of their customer’s brand.”

The survey found that 89% of respondents seek strategic 3PL partnerships, with 65% rating the level of control they turn over to 3PLs an 8 or 9 on a 10-point scale, reflecting the critical importance of these relationships.

The survey identified key issues that are standing in the way of more successful 3PL relationships — and how retailers would like them to be resolved. These include:

• 3PL performance gaps impair customer relationships. Half (51%) of respondents report orders that are damaged on arrival as their top customer complaint, followed by difficulty with the returns process (42%) and late delivery (37%).
• Past 3PL experiences impact trust-building. A substantial 69% of respondents have concerns about giving up control to 3PL, with 44% strongly or somewhat agreeing that past experiences have made them wary, and 53% strongly or somewhat agreeing they are reluctant to share internal data. 
• Retailers have a clear view of what makes a partnership strategic. Transparency (35%) and collaboration (34%) are the most important qualities that distinguish a strategic partner from a more transactional retailer-3PL relationship. Regular sharing of real-time visibility into inventory levels (71%) and forecasting/sales data (45%) are hallmarks of strategic relationships. 
• Retailers are willing to invest more in strategic relationships. Nearly two in three (65%) retail respondents say they are willing to offer greater transparency during the proposal, contract and onboarding process in order to enrich their 3PL relationship and more than half (54%) are willing to more clearly communicate their service expectations and growth plans.

3PLs play a critical role as extensions of their customers’ brands, and retailers rightfully expect them to live up to that role, the survey found. However, assertions that many brands plan to change providers attest to their disappointment about what they’re actually getting. 

Great 3PL relationships are possible when a retailer makes sure their 3PL is offering all the ingredients retailers define as important to a solid, strategic relationship that reinforces the power of their brand, says Peter Davis, VP/GM of fulfillment at WSI. 

“The best 3PLs won’t be those that just focus on picking and packing, but instead those that aim to be true partners for the key stakeholders, including team members and the environment,” Davis says.

To download the full research report for free, please click here. 

Survey Methodology

WSI collaborated with Supply Chain Dive’s studioID to conduct the online survey in May 2024, receiving responses from 150 respondents with C-suite, SVP/VP and director titles, primarily in supply chain/logistics/transportation and executive leadership roles. They responded to a series of multiple-choice questions about their attitudes and actions around the strategic importance and performance of 3PLs. Respondents represented e-commerce/direct-to-consumer, brick and mortar, and omnichannel retailers with annual revenues between $5 and $100 million.