Top 100 Logistics IT Providers & Market Research Survey-Apr 2017

It’s not our father’s supply chain anymore, and nobody knows that better than logistics technology providers. It wasn’t so long ago that the most innovative technology solutions were available only to large shippers and providers with money to burn, but legacy systems that require a huge investment have become a thing of the past. Thanks to Software-as-a-Service—or cloud-based solutions—the game has changed considerably in recent years.

Not only can shippers now implement high-quality solutions at affordable prices, but they can also crowdsource their data and freight to gain economies of scale, allowing them to negotiate competitive rates, increase visibility, and benchmark performance—something many couldn’t do easily even one decade ago, and not at all a decade before that. The shared efficiencies offered by these newer platforms enable users to glean top value along the entire supply chain with minimal effort.

With so many options flooding the market, it can be difficult for shippers to decide where to get their technology solutions from. They can go direct to vendors, or let a third-party logistics (3PL) provider or carrier partner guide them through the process.

Having the right information helps users and buyers of all sizes stand on even ground with an equally varied set of competitors, but staying on top of trends in such a rapidly changing environment can be difficult. Fortunately, Inbound Logistics’ annual logistics technology perspective research provides decision makers a pulse of the industry so they can make informed decisions about where, what, when, why, and how to implement new solutions. We surveyed nearly 150 logistics IT solutions providers to keep you abreast of what’s happening in the marketplace, and showcase trends that will help in your decision-making.

The annual IL Top 100 Logistics IT Providers list (page 80) celebrates companies on the forefront of supply chain technology solutions that continually enable shippers to operate with best-in-class supply chains.

AT WHAT COST?
Logistics technology aims to limit headaches and increase performance for supply chain stakeholders. As such, we asked IT providers to name the biggest hang-ups for their customers (Figure 1). Cost still tops the chart, with 85 percent of respondents naming the overall cost of logistics ownership as a concern. Integration claims the number-two spot, with 75 percent naming it as a pain point, up 7 percent from 2016, suggesting that the rapidly changing pace at which solutions are developed has customers nervous about an ability to integrate into existing business processes.

FIG. 1 CHALLENGES: WHICH TRANSPORTATION AND LOGISTICS CHALLENGES ARE MOST CRITICAL TO YOUR CUSTOMERS?

Seventy-two percent cite visibility as an issue, only a slight drop from 2016. Customer service, transport optimization, and data management also deserve honorable mentions as major concerns, though all experienced slight declines over 2016 figures.

The logistics IT sector remains hot for another year, with respondents reporting an average 14-percent increase in sales and more than 12 percent in profits, year-over-year. The customer base for technology solutions also experienced substantial growth, with IT companies reporting an average of slightly less than 13-percent customer growth.

Good old-fashioned elbow grease takes the credit for most of these gains, with 85 percent of technology companies reporting organic gains, though 15 percent achieved gains through mergers and acquisitions or a mixture of the two methods (Figure 2).

FIG. 2 LOGISTICS IT PROVIDERS REPORT GROWTH

AT YOUR SERVICE
There’s no shortage of need for logistics and supply chain technology in the transportation sector, with nearly 88 percent of technology company respondents providing services to 3PLs, carriers, forwarders, brokers, and everything in between—an increase of nearly 3 percent over 2016 (Figure 3). Manufacturing experienced a slight drop year-over-year, with 79 percent of providers reporting that they support the industry. This is a reversal of the 2016 trend, which saw manufacturing on an uptick.

FIG. 3 INDUSTRY SERVED: WHAT INDUSTRIES DO YOUR SOLUTIONS SERVE?

Retail took that jump instead, with companies served in that sector clocking in at 79 percent, an increase of 5 percent over the previous year in a strong showing for brick-and-mortar, especially with e-business showing a 4-percent drop to 58 percent. Providers also increased their services to the wholesale sector by about 3 percent over 2016, and services/government held steady at 44 percent.

It’s often difficult to differentiate between logistics and supply chain solutions, but each year IL splits that hair by asking respondents to report separately on which logistics and supply chain solutions they offer.

Logistics solutions such as load planning and inventory management (Figure 4) are often more transactional, as shippers focus on squeezing every penny out of each shipment and process. Supply chain solutions (Figure 5) cover strategic, enterprise-level processes, such as global trade or product lifecycle management.
FIG. 4 LOGISTICS SOLUTIONS OFFERED

FIG. 5 SUPPLY CHAIN SOLUTIONS OFFERED

The logistics technology sector continues to soar into the cloud, with 53 percent of providers exclusively offering web/cloud/SaaS/hosted solutions, just 2 percent offering only local solutions, and 45 percent offering both (Figure 6). This is a drastic shift from a time not so long ago when customers demanded locally hosted solutions and mistrusted the cloud’s ability to provide data security.
FIG. 6 PLATFORM: HOW DO IT PROVIDERS DELIVER THEIR SOLUTIONS?

In the several decades that IL has conducted this survey, one trend is clear: Customers continue to demand cost-effective solutions, and the logistics technology sector continues to deliver. Once upon a time, only huge operations could afford the cost and interruption involved with implementing a best-in-class logistics technology solution. But today, providers offer solutions that are transactional or even free (Figure 7). Lower costs and easy implementation enable even small operations to stand toe-to-toe with the biggest corporate giants.

FIG. 7 COST BASIS: HOW DO USERS PAY FOR TECHNOLOGY SOLUTIONS?