Third-party logistics/technology: GT Nexus and Panalpina are collaborating
Further evidence that technology will be a key differentiator among providers of third-party logistics surfaced this week.
Patrick Burnson -- Logistics Management, 11/5/2009
SAN FRANCISCO—Further evidence that technology will be a key differentiator among providers of third-party logistics (3PLs) surfaced this week with the announcement that GT Nexus and Panalpina are collaborating.
Panalpina -- ranked by the consultancy of Armstrong & Associates, Inc. as being among the five 3PLs in the world -- has rolled out a global transportation rate management hub on the GT Nexus Trade and Logistics Portal. This product is delivered as a hosted service over the Web.
The platform is the central repository for transportation contracts and rates representing over 1.2 million twenty-foot equivalent units (TEUs) of containerized shipments that Panalpina is managing for shippers worldwide.
Brooks Bentz, partner at consulting firm Accenture, told LM in a recent interview that this trend would continue to take hold in the global 3PL industry, going hand-in-hand with the need for more high-tech solutions.
“In this economy, it's all about cost,†he said. “Pressure on rates and fees is continuing to mount, and 3PLs want to see an immediate return on investment...whether it be in tactical technology or strategic consulting.â€
And while this trend began in North America, the emphasis on cost savings has become truly global, said Bentz. What makes this hard, he added, is that a threshold may now be lurking beneath the surface.
The GT Nexus platform supports all of Panalpina’s global ocean trade lanes, across all carriers that the 3PL works with. The entire platform is provided on-demand over the Internet. According to spokesmen, Panalpina did not need to buy and install any software, and the platform was up and running in about 8 weeks.
The news coincides with the announcement that Panalpina had a sharp drop in third quarter earnings, while it strengthened is competitive position.
Spokesmen for the Geneva-based company told shareholders that it had improved ocean and air freight market share on key trade lanes, but that earnings before interest and tax fell to $10.7 million in the three months to Sept. 30 from $57.2 million a year ago while net forwarding revenue shrunk to $1.4 billion from $2.36 billion.
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