Subscribe to our free, weekly email newsletter!


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

By Patrick Burnson, Executive Editor
June 01, 2010

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

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

While shippers ready themselves for the long Labor Day weekend, we’d like to remind them that new security and compliance regulations are - as always – looming ahead.

United States Class I carloads were down 56,104 carloads–or 4.6 percent annually–at 1,115,957 in August, and intermodal containers and trailers were up 3.6 percent--or 38,617 units- at 1,114,370.

A new report from Chicago-based freight transportation and logistics consultancy CarrierDirect released this week examines current freight market conditions and what logistics and supply chain stakeholders need to do and know in order to stay one step ahead of the competition.

You’ve heard the old saying, it was the best of times, it was the worst of times. Rob Handfield sees this as the best of times for procurement professionals, who have an opportunity to deliver real value to their organizations

While core metrics were down from a very impressive July, the August edition of the Non-Manufacturing Report on Business from the Institute of Supply Management (ISM) was still very strong.

Article Topics

News · Logistics · All topics

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