3PL news: Analysts suggest global/domestic lines may be blurring

Is the line between the top third-party logistics providers blurring? Analysts we recently spoke with think so. Richard Armstrong, chairman of Stoughton, Wisc.-based Armstrong & Associates, noted that the industry mirrors what has occurred in the ocean carrier sector over the years.

By ·

Is the line between the top third-party logistics providers blurring? Analysts we recently spoke with think so. Richard Armstrong, chairman of Stoughton, Wisc.-based Armstrong & Associates, noted that the industry mirrors what has occurred in the ocean carrier sector over the years.

“Does it really matter if you book cargo on a vessel that is based in Denmark?” he asked in an interview with LM. “It’s carrying containers from Korean and Japanese shippers, and may even be sailing under a flag of convenience. The national identity is gone, and the idea of doing business in a single national market is nonsense.”

He also noted that U.S.-based multinational shipper, McDonalds, makes more money in foreign markets overseas.

“So that’s what’s happening to the paradigm,” he says. “Most of the really big 3PLs are following the same model. To be purely domestic is to remain stuck in one place, and no one is going to sacrifice potential revenues to do that.”

At the same time, however, Richard Armstrong insisted that some 3PLs are stronger in one region than another—and by that measure – the “domestic” category is still valid.

“But since the greatest growth is going to take place in India and China in the coming years, we are concerned about 3PL service in the U.S.,” he said. “If it is all outsourced, this country will be a fading power…like Great Britain in the 20th Century.”

London-based, eyefortransport (EFT), may take issue with the historical allusion of this statement, but certainly not with the insight. Research done by the analysts for its “North American 3PL Market Report” suggest that a modest rebound must take place this year to keep this U.S. and its hemispheric neighbors in the game.

The report focuses on the opinions of logistics service providers (3PLs/4PLs), manufacturers or retailers, and supply chain technology providers, and offers comparative views between these groups of respondents.  The report also pays particular attention to the state of the global economy, and other shipper concerns.

“The end of 2009 going into 2010 has been a time of challenges and opportunities in the supply chain and logistics industry,” said Katharine O’Reilly, EFT’s senior vice president of research. “On the one hand the fall-out from the recession continues to rock all industries—yet on the other hand—the green shoots of recovery, and the opportunity to gain new market share and develop new, innovative strategies and relationships has opened up sections that were previously closed due to the relative stability.”


About the Author

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 [email protected]

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!

Article Topics

Logistics · All Topics
Latest Whitepaper
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...