Subscribe to our free, weekly email newsletter!


3PL news: Penske exec elaborates on “state of the industry”

By Patrick Burnson, Executive Editor
June 15, 2010

Prior to the release of the 21st annual State of Logistics report by the Council of Supply Chain Management Professionals (CSCMP) at the National Press Club last week, Penske Logistics gave LM an exclusive interview on some of the details. As the principal sponsor of the report, Penske also had some industry insider intelligence to share on the impact made by the two-year recession first felt in 2007.

Interview with Vince Hartnett, President, Penske Logistics

Vincent W. Hartnett, Jr., the company’s president, said that last year Penske’s leasing was affected by lower business activity, but has been ramping up since the last quarter of 2009, with fewer reductions in overall service.

“Food and beverages were not hit as hard as the manufacturing sectors, he added, noting that contract logistics in all sectors is coming back.

“Year to date, signs are improving, with about 60 percent of that in the logistics wing. But it’s not a tide that will make all ships rise,” noted Hartnett.

“Regional growth is spotty and mixed. The NAFTA (North American Free Trade Agreement) countries will have a medium level of improvement and the overseas stars will be China and Brazil. The EU will be the laggard, with most forecasts suggesting just 1 percent growth this year.”

Hartnett stressed that none of this represents a long-term forecast, however.

“Our commercial rental fleet has seasonal surges, and is most sensitive to changes,” he said. “But when the demand is there, we can provide heavy duty trucks for companies that have reduced their own assets.”

Meanwhile, Penske is set on striking up strategic alliances with companies that can respond quickly to market changes and are capable of reducing costs rapidly.

“We are looking out for best practices, and companies with the most agile supply chains,” said Hartnett. “That includes those capable of stripping out capacity when needed.” And that means more manufacturers will be “near-sourcing” in the future, he said. “Not that out-sourcing will necessarily go away,” Hartnett added. “In this global economy, it still makes sense to use low-wage countries for much of the labor, but we see a hybrid emerging where local demand will be taking up a lot of regional inventory.

Consumers in Mexico, for example, will be buying from wholesalers and retailers who have goods made in the region, according to Hartnett. And as a consequence, manufacturers will have to balance their logistics portfolio to ensure a robust supply chain.

In the end, said Hartnett, “cash is king,” and those who protect their capital by not carrying costs and inventory will prevail. “Especially in this tight credit market,” he added. He advises shippers to avoid locking themselves into long-term contracts with distribution centers, and to work closely with supply chain partners.

“It’s still not a good time to be taking chances,” he said. “Smart risk management means taking a collaborative approach. We try to get inside our partner’s business and help them reduce cost by building in efficiency.”

The final key, said Hartnett, is to “execute flawlessly,” while keeping communication channels open and transparent. At the same time, both parties must realize that innovation will remain a shared goal.

Click Here for Full Video: State of Logistics Report Presentation

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

Last year at this time, retailers were relieved to learn that a tentative agreement on a new labor contract had been reached by dockside labor and management on the U.S. East and Gulf coasts. But not without considerable blood on the floor.

The National Retail Federation is encouraging maritime management and the union representing dockworkers along the U.S. West Coast ports to expedite pending contract negotiations and reach agreement on a new deal well in advance of the expiration of the current contract this summer.

SAP AG announced the availability of a new application to help centralize processing trade activities, SAP Global Trade Services, processing trade in China. 



Did you know that Supplier Portals can help companies reduce risk, improve compliance and enhance product availability? Download Amber Road's latest research report featuring research from Gartner.

Problem: In the margin-challenged consumer goods industry, your supply chain is under constant pressure to cut costs and maintain customer service and visibility. Solution: By breaking through silos and viewing the supply chain holistically, companies like yours are reducing supply chain costs by an average of 10% to 20%.

Article Topics

News · 3PL · Logistics · China · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA