NEW YORK — A transportation research and consulting firm says the search for freight has turned LTL trucking companies and third-party logistics providers into unlikely allies.

Evan Armstrong, president of Armstrong & Associates, told delegates to the Southern Motor Carriers Association (SMC3) summer conference in West Palm Beach, Fla., that even carriers that have traditionally kept 3PLs at arm’s length are now cooperating with them to keep trucks rolling.

According to a Journal of Commerce report, Armstrong said 93 percent of Fortune 100 companies use at least one third-party logistics company… and many use far more. General Motors, for example, has 49 3PLs, Procter & Gamble 42, and Wal-Mart 39.
"It’s only over time that many of us have changed.

"For companies with multiple supply chains, it’s very hard to single source with one provider," Armstrong said.

One recent example cited at the conference: when Con-way Freight expanded its business with Caterpillar Logistics, it not only gained greater access to freight from $32.4 billion Caterpillar but also to more than 65 other companies that contract Cat Logistics to manage their supply chains.

Panelists at the SMC3 conference agreed that trucking executives are loathe to rely on 3PLs for freight — especially those who have built their freight business on direct relationships with shipper customers. They fear they’ll be distanced from their customers and lose control over pricing.

In fact, Bruce Kennedy, vice president of enterprise strategy at YRC Worldwide, said carriers often responded to the growth of third-party logistics with "open hostility."

"It’s only over time that many of us have changed," he is quoted as saying. Brokers or logistics intermediaries account for more than a third of YRC Worldwide’s revenue, he told the audience.

Carrier attitudes toward 3PLs are likely to vary with the type of logistics provider or broker. YRC Worldwide last year divided its 2,000 3PLs into four groups: supply chain managers, brokers and forwarders, price negotiators and "rate resellers."