What underlies Gartner’s new 3PL Magic Quadrant? Technology

3PL has always been an industry shaped around the needs of its clients, and those needs are quite different than they were a year ago. What was a winning strategy last year is in dire need of revision today. 

During the pandemic, 3PLs came to the rescue of technologically unprepared shippers, who lacked the expertise to compete in the new environment. For companies that outsourced to 3PLs, what had been a part of the business became the key. On top of that, they also played a critical role in vaccine distribution and cold storage space given the worldwide logistic squeeze.

See how ITOrizon leveraged cloud supply chain solutions and implemented a complete end-to-end digital transformation for a 3PL provider firm.

Gartner's 3PL Magic Quadrant

One of the best barometers for the changes in the industry is Gartners 2021 3PL Magic Quadrant insight. This framework, which they update annually, offers a snapshot of where different industry players stand, and how well they’ve adapted to the new normal. The report evaluated 19 third-party logistics providers that met Gartner’s criteria for inclusion.

Gartner evaluates multiple factors in their assessment, but the main weightage is towards 3PLs’ product & services, customer experience, innovation and geographic strategy. These factors are combined into two axes on their quadrant: Completeness of Vision and Ability to Execute.

In broader terms, the former measures strategic thinking and innovation, which the latter corresponds to satisfying the needs of their end customer. This framework is then divided into 4 quadrants, which are labeled niche players,’ visionaries,’ ‘challengers,’ and ‘leaders. Leaders excel at axes, while ‘niche players’ rank less favorably on both. Visionaries stand out in Completeness of Vision, while challengers execute exceptionally well but have less strategic mojo.  

The Assessment

The framework looks at several criteria to determine where a firm should be placed. The thriving 3PL form stayed agile and resilient during the pandemic, successfully implements and deploys technological innovation, offers a diverse and socially sensitive workplace, and innovates without being asked.

Year-to-year, an examination of the quadrants reveals which firms successfully navigated the recent turbulence, and which struggled. Industry heavyweights like FedEx, DHL, UPS, XPO, Kuehne + Nagel and Geodis retained their Leader status, while CEVA Logistics slipped back to Challenger quadrant. Within the leader quadrant, UPS and XPO moved up by a few points.

UPS’s bump was almost certainly due to their global investment and their stellar customer experience, reflecting the emphasis on geography strategy and customer experience. Similarly, XPOs’ gained in products & services for their overnight digital dexterity and end-to-end supply chain visibility, a crucial component in pandemic-era logistics.

Past niche players like Penske Logistics and Redial were upgraded to the Visionaries quadrant, while Echo Global Logistics, a Global Trade Top 50 3PL provider, has entered the quadrant this year as a niche player. 

Within the Challengers quadrant, Expeditors saw a notable bump by strengthening their digital offerings. 

The 2021 Gartner 3PL Magic Quadrant Chart

It is a safe bet that being a 3PL leader is essentially impossible without a sustained and sustainable investment in technological innovation and future-proofing. This is easier said than done, as it requires multifaceted systems that can rapidly adapt to any scenario or client in ever-less time and effort.

Thankfully, composable enterprise platforms like UCBOS put such capabilities within the reach of any 3PL company looking for the supply chain of tomorrow.



Users are free to configure the system by answering the business questionnaire. It is configured based on the operational workflows, and the application gets customized based on user responses. Users are free to revise their responses in business changes, and the application layout is adjusted accordingly.    

Enhancements and customizations are straightforward in the cloud version. Webhooks, known as user exits in MAWM are widely available and well spread across the application. This enables customers to have custom logic outside the cloud WMS application and lets them integrate back into the application.

In short, customers can develop logic specific to their business in the external layers. Examples of external layers include integration or business orchestration layers like UCBOS, which helps API management and workflow routing are effortless. 

Technical Support

Supply Chain Logistics is getting much-needed attentions from CXOs and 3PLs are certainly using this momentum and investing, building their Shipper of Choice clientele list.  

For the enterprising 3PL, investing in the technology necessary to compete with the UPS and XPOs of the world isn’t a want anymore – it’s a need. Looking how to break into the Magic Quadrant? Start upgrading today.  

Manhattan Associates does offer instructor-led sessions for Manhattan Active Warehouse Management Product Level 2. Please check here for availability.   

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