Subscribe to our free, weekly email newsletter!


2014 State of Logistics: 3PL—Omni-channel fulfillment to reshape market

By Patrick Burnson, Executive Editor
July 01, 2014

The 25th Annual State of Logistics Report states that revenues for the third-party logistics provider (3PL) sector rose 3.2 percent in 2013, much lower than the 5.9 percent growth the market saw in 2012.

“The industry has been faced with slow growth globally, and a general reticence to make new investments,” says analyst Rosalyn Wilson, the lead author of the annual report. “The exception has been the continued strength of the domestic 3PL market, where shippers are engaging 3PLs to ensure that they have the capacity when it’s needed.”

Citing the work of 3PL market analyst firm Armstrong & Associates, the annual report states that the 3PL sector can be sliced into four segments, each representing a subset of the industry. While still the smallest segment, the domestic transportation management segment has been the fastest growing.

And last year was no exception, with gross revenues up 7.1 percent—just a little lower than 2012’s 9.2 percent. With capacity a rising issue, the dedicated contract carriage segment continued to gain ground, rising 3.6 percent in 2013. Freight forwarder revenue rose 4.2 percent as well, adds Wilson.

Meanwhile, Capgemini Consulting, a prominent IT think tank and 3PL outsourcing advisor, contends that omni-channel fulfillment challenges, especially in the retail sector, are reshaping the current 3PL marketplace. The distinction between forwarder and lead logistics provider, as a consequence, may become even more blurred over the course of this year.

“A customer-driven supply chain may eliminate some legacy roles,” says Shanton Wilcox, vice president at Capgemini. “The last mile logistics now includes responsibility for the customer experience, shifting priorities, and attention across the supply chain.”

Likewise, Wilcox says, customer demand is pushing delivery interfaces up the supply chain and nearer to the point of manufacturing. Retailers are moving to virtual inventory management, accounting for product at all phases of movement as opposed to limiting sales by physical warehouse inventory rules.

“Overall, fulfillment is being driven by the savviest consumer, with creative and diverse solutions entering the third-party logistics market space to meet those omni-channel needs,” says Wilcox.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 56.9 in February, which was 0.2 percent ahead of January and also 0.1 percent ahead of the 12-month average of 56.8. Economic activity in the non-manufacturing sector has grown for the last 61 months, according to ISM.

Non asset-based third-party logistics (3PL) services and logistics technology services provider Transplace said today that Brooks Bentz has joined the company in a newly-created role as president of Transplace Consulting in conjunction with the launch of the company’s new North American consulting services practice.

The advent of e-commerce continues to grow and gain increased traction over time. The many ways for consumers to order and purchase goods online continues to expand and leads to various subsequent byproducts of online purchases, including shopping through multiple channels, and delivery and payment options, among other things. These types of topics serve as the thesis in the second annual UPS Pulse of the Online Shopper Global Study issued this week by UPS and comScore Inc.

A major highlight of CEVA’s fourth quarter performance was its new business wins, which were up 14 percent for all of 2014, with Freight Management wins up 14 percent, and Ocean Freight and Air Freight wins up 30 percent and 14 percent, respectively, while Contract Logistics wins were up 2 percent.

When an industry is changing rapidly, companies must adapt in order to survive. In this whitepaper, a global publisher was seeking a partner that could mitigate risk and build a platform flexible enough for their shifting customer expectations. The solution enabled the company to rewrite their operations game plan and transform their supply chain.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA