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

Now that the deal, which had to clear several regulatory hurdles in multiple countries, is official, FedEx executives were able to speak a little bit more freely, albeit being somewhat guarded in regards to certain integration specifics at the same time.

As the July 1st date for complete compliance looms, shippers are seeking help to cope with the mandatory changes instituted by the International Maritime Organization (IMO) to the Safety of Life at Sea Convention (SOLAS).

As of July 1, only containers with a verified gross mass will be cleared to be loaded onto a ship under the International Maritime Organization’s Safety of Life at Sea (SOLAS) Verified Gross Mass (VGM) amendment. Shippers hoping that the implementation of the ruling will be delayed or deferred are whistling in the dark, say industry analysts.

Amid the many worrisome economic indicators kicking around of late, something along the lines of good news came about this week in the form of United States new home sales data, issued by the United States Department of Commerce this week.

In March, the SCI came in at 0.4, which FTR described as “a near neutral reading” on the heels of four months of more favorable market trends for shippers.

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