Subscribe to our free, weekly email newsletter!


Third-Party Logistics: Exclusive interview examines state of the industry

The second installment will appear tomorrow, on the eve of her much anticipated SOL presentation at the National Press Club in Washington.
By Patrick Burnson, Executive Editor
June 13, 2011

As she prepares her 22nd annual “State of Logistics” report, supply chain expert, Rosalyn Wilson, provided an exclusive forecast for the third-party logistics (3PL sector) with Supply Chain Management Review—LM’s sister publication.

Wilson, senior business analyst at Delcan Corportation, is also a frequent SCMR contributing blogger. This is the first of a two-part series.

The second installment will appear tomorrow, on the eve of her much anticipated SOL presentation at the National Press Club in Washington.

Supply Chain Management Review: Will 3PLs be more reliant on intermodal options in the coming year as a hedge on energy costs?

Rosalyn Wilson: I am not certain that they will be more reliant on intermodal because of energy costs, but I think there will be a definite increase in intermodal because of tight capacity in the trucking sector.  Intermodal will be the pressure relief valve as volumes grow faster than capacity (both equipment and drivers) can expand. I think energy is going to continue to be very volatile, but as we have seen over the last few days, fuel prices are just as likely to drop downward for no apparent reason, as they are to climb. The sad truth, though, is that each time we go through these cycles, the bottom seems to inch up.

SCMR: Will shippers have fewer modal choices as a consequence?

Wilson: Shippers are more interested in purchasing a transportation service that meets their desired combination of price and delivery specifications, than they are in having their shipments moved by a certain mode. So, to the extent that they can move their freight to meet their requirements, they will continue to be mode neutral. Where I do think there will some reduced choices is in moves that require special equipment, because many carriers are divesting themselves of equipment that does not generate the highest revenues. Compared to the choices shippers have had the last few years, they will feel like their options have decreased because there are fewer carriers competing for their business.

SCMR: What key competitive advantage do “mega” 3PLs have?

Wilson: Generally the largest 3PLs have made significant investment in IT solutions and have strengthened their offerings as the market has required it. They tend to have a wider global reach with stronger contacts or people on the ground to facilitate shipments to and from overseas markets. Most of the mega 3PLs now have strong brand recognition, which often gets them in the door easier and almost guarantees them a slot on RFP shortlists. The mega 3PLs also have volume advantages and arrangements with more carriers, so can often get better rates. They also tend to have a larger degree of vertical integration, offering other services, such as warehousing.

For related articles click here.

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 Congress has issued another highway funding Band-Aid – a $10.9 billion highway bill through next May that former Transportation Secretary Ray LaHood blasted as “totally inadequate” – what can we expect as the infamously do-nothing 113th Congress winds down in the next month before taking yet another recess to prep for the mid-term elections?

Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.

Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.

With a 0.8 cent decrease, this week’s average price per gallon is $3.835 and stands as the lowest price since hitting $3.844 the week of November 25, 2013.

LTL carriers are rapidly investing in expensive, on-dock, three-dimensional size measurement capturing machinery, and they are hoping one day of being able to more accurately charge shippers rates based on the actual dimensions of their shipments, rather than the traditional weight-and-distance-based formula that has been in effect since the 1930s or even earlier.

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