Subscribe to our free, weekly email newsletter!


State of Logistics: Third-party logistics providers (3PL)

By Patrick Burnson, Executive Editor
July 01, 2013

According to the leading analysts in third-party logistics (3PL) space, the concept of “mega cities” in developing countries with above average per capita income rates of growth such as Shanghai, Bangkok, Mumbai, Hanoi, Jakarta, and Sao Paulo will drive consumer demand for finished goods globally.

Today, forward-looking U.S. based 3PLs such as Jacobson, Menlo Worldwide, UPS, and OHL have invested heavily in expanding international operations to meet the new challenges.

“Today, China has about 90 cities with more than 250,000 middle class consumers,” observes Alan Amling, global director for contract logistics marketing at UPS. “By 2020, China will have more than 400 cities with a quarter million middle class residents—and 50 will have more than a million.”

Amling notes that as companies position to capitalize on this demand, their 3PL partners will need to ensure that they have the right infrastructure and expertise in place to facilitate these business strategies.

“A key value that 3PLs can provide shippers as we move forward is market knowledge across multiple regions and industries,” says Amling. “Another value is to help companies take advantage of the growth opportunities they decide to pursue.”

Not only do some global 3PLs have existing infrastructure in global markets, but they also have the in-country expertise to help companies navigate trade regulations, get products to end customers, and provide post-sales services. Should that keep domestic 3PLs from going global? Amling doesn’t think so.

“If the 3PL strategy is to provide an end-to-end experience for shippers, they have to enter this arena,” says Amling. “As supply chains become more global and more complex, we’re seeing a trend toward companies reducing the number of 3PLs they use, but expecting these 3PLs to do more.”

That said, there’s a lot of opportunity in the market, and putting up a global network may not be the right move for all 3PLs. He notes that there will continue to be opportunity for local and regional providers to be integral components of company supply chains. Amling asks: “The real question is with 95 percent of the world’s consumers now outside the U.S., can domestic shippers afford to avoid going global?”

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

Manufacturing activity in April remained on the right side of growth for the second straight month, following six months of contraction, according to the April edition of the Manufacturing Report on Business from the Institute for Supply Management (ISM).

Some 22 centuries after the original Silk Road smoothed the path of Chinese silk merchants to Europe, a new effort is beginning to build a new 21st century highway between Europe and the burgeoning economy of China, now the world’s fastest-growing market.

A new study released recently from global management consulting firm A.T. Kearney promises to provide supply chain managers valuable advice on risk mitigation

The most recent edition of the Shippers Conditions Index (SCI) from FTR showed solid gains for the fourth straight month, with market trends remaining favorable for shippers.

Shippers and other ocean cargo carrier stakeholders should be cheering the announcement made today by The U.S. Coast Guard, as it formally notified the International Maritime Organization through a Declaration of Equivalency that the United States position on SOLAS is that there are multiple methods to submit the combined cargo and container weight (Verified Gross Mass or VGM).

Comments

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


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA