Technology capabilities have become hugely important in evaluating third-party logistics providers. Shippers increasingly look to 3PLs for solutions and capabilities they don't have internally or aren't interested in building themselves. Yet the 30th Annual 3PL Study from NTT Data reveals a troubling disconnect: shippers aren't always convinced that 3PLs have the right technological capabilities. This expectations gap threatens to undermine the strategic partnerships that both sides recognize as essential for navigating market volatility.
What Shippers Want: Strategic Visibility and Scenario Planning
Shippers place increasing emphasis on the ability to conduct what-if scenario modeling. They want to look end-to-end across their supply chains, understanding upstream suppliers, downstream distribution, and everything in between. Most critically, they want to ask: if this disruption happens, how should we respond?
This demand reflects operational reality. Recent years have demonstrated that disruptions arrive without warning and require rapid strategic responses. Tariffs changed inventory strategies within weeks. Port congestion forced routing changes. Labor shortages required capacity reallocation. Shippers need technology that enables them to model these scenarios before they occur rather than scrambling reactively when events unfold.
The emphasis on scenario modeling represents a fundamental shift from descriptive analytics—what happened—to prescriptive analytics—what should we do given various possible futures. This requires integrated data across the entire supply chain network, sophisticated modeling capabilities, and systems that can process multiple variables simultaneously while accounting for constraints and dependencies.
What 3PLs Prioritize: Execution Excellence
Third-party logistics providers are increasingly interested in execution capabilities. During tariff uncertainty, 3PLs were asked: if shippers have all this inventory they bought ahead, what are we supposed to do with it? Where should it go? How do we execute, given the constraints we've been given?
This execution focus drives 3PL technology investments toward warehouse management optimization, transportation routing efficiency, real-time tracking, and operational problem-solving. These technologies help 3PLs execute on behalf of shippers as effectively as possible, given the conditions and constraints they receive.
The execution emphasis makes operational sense. 3PLs get measured on delivery performance, cost efficiency, and operational quality. Their core value proposition centers on executing logistics operations more effectively than shippers can manage internally. Technology investments naturally flow toward capabilities that improve execution metrics.
The Table Stakes: Data Integration Requirements
Both perspectives share common prerequisites that create barriers to achieving their respective visions. Having the right data represents the first table stake. Organizations need accurate, complete, timely data across all supply chain operations. The second table stake: having an integrated data landscape or data layer that brings together disparate datasets to support end-to-end decision-making.
Shippers and 3PLs often understand how significant this requirement is but lack clarity about where they stand on the journey toward end-to-end visibility. This uncertainty creates the gap between shipper expectations and 3PL reality. Shippers expect capabilities that require data integration foundations that neither party has fully built yet.
Without unified data across systems, scenario modeling produces unreliable results. Without integrated visibility, execution optimization remains localized rather than network-wide. The technology both sides want requires data infrastructure investments that many organizations have deferred or underestimated.
Capital Investment and Business Case Challenges
Technology capabilities that shippers want and 3PLs need to provide require substantial capital investment. The business case is always top of mind for 3PLs considering new technology implementations. Capital requirements to bring in new capabilities create natural hesitation, especially when relationships with individual shippers might not extend long enough to justify investments.
3PLs want assurance that technology can outlive individual shipper relationships, even extended ones. This creates tension. Shippers want cutting-edge capabilities tailored to their needs. 3PLs need technology investments that serve multiple clients across various industries and operational models. Reconciling these requirements proves difficult.
The challenge intensifies because technology that delivers strategic visibility and scenario modeling requires more investment than execution-focused tools. Warehouse management systems and transportation optimization software have clear ROI calculations tied to operational efficiency. End-to-end visibility platforms with scenario modeling capabilities require larger investments with less direct operational ROI and more strategic value that's harder to quantify.
Co-Investment as a Potential Solution
Co-investment between shippers and 3PLs represents one approach to overcoming capital barriers. When both parties invest in technology capabilities together, they share financial risk while aligning interests to ensure successful implementations. The 30th Annual 3PL Study identifies technology as one of the most important areas for co-investment opportunities.
However, co-investment only works with deep partnerships and substantial trust. Organizations won't co-invest in technology without confidence in the longevity of the relationship and in mutual commitment to shared objectives. This creates a circular dependency: strategic partnerships enable technology co-investment, but technology capabilities increasingly define whether partnerships can be strategic.
Organizations that successfully navigate this challenge treat technology investment as relationship investment. They recognize that building integrated data platforms and scenario modeling capabilities strengthens the partnership itself by enabling better joint decision-making during disruptions.
Data Governance: The Hidden Investment Requirement
Beyond technology platforms themselves, organizations must invest in data governance strategies. Somebody needs to drive data governance. Somebody needs to maintain centers of excellence or whatever structure achieves stronger data governance. Otherwise, sophisticated technology tools remain useless.
These softer investments often get overlooked in business cases focused on technology platforms. Yet without data governance, quality management, and integration frameworks, even the best technology delivers poor results. Organizations must embed these capabilities into business cases, which can make technology investments appear less attractive in the short term, despite their essential role in long-term success.
The data governance investment spans both shipper and 3PL organizations. Shippers must standardize data formats and quality from internal systems. 3PLs must ensure data from their operations integrates cleanly with shipper systems. Neither can succeed independently, which again reinforces the requirement for strategic partnerships rather than transactional relationships.
Bridging the Gap Through Transparency
Closing the technology expectations gap requires transparency about capabilities, limitations, and roadmaps. Shippers must openly discuss their strategic technology needs and timelines. 3PLs must honestly assess their current capabilities and investment plans. Both parties must collaborate on prioritization given resource constraints.
Organizations that have successfully bridged this gap share several characteristics. They engage in regular discussions about technology roadmaps as partners rather than vendor-customer transactions. They prioritize investments based on joint strategic objectives rather than individual operational metrics. And they commit to multi-year relationships that justify substantial technology investments from both parties.
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