3PLs must make adjustments in China

By Patrick Burnson, Executive Editor
May 15, 2014 - LM Editorial

Beyond just export and freight forwarding services, third-party logistics providers (3PLs) in China are now offering pick-and-pack services for direct-to-customer shipments in the U.S. and Europe, observes Rosemary Coates, president of Blue Silk Consulting and author of Rules for Sourcing and Manufacturing in China.

“3PLs will prepare individual shipments for end customers, then overpack and consolidate to take advantage of bulk shipping to a US or European distribution hub,” she says. “For example, Nike has a web store (Nike ID) where you can design your own shoes (colors, style, personalization).  The shoes are then manufactured in Shenzhen, China and shipped to U.S. customers via UPS consolidation to the UPS Louisville hub.”

Incoming containers are broken down and individual pairs of shoes are sent on their final route to customers via UPS domestic delivery.  No inventory is kept in any part of the supply chain.  These shoes are manufactured on demand.

“Smaller 3PLs and freight forwarders without global networks, processes and IT systems cannot compete with the larger, more sophisticated global companies,” says Coates. “This is key…without global IT systems, the ability to serve customers in China or any region of the world is limited.”

According to Coates, as supply chains become more global and more complicated, IT systems become the backbone to supplying critical supply chain information. Other key observations:

*Operations people need to know where supplies are and how they are moving to support production
*Customers want to know where their orders are and when they will arrive
*Customs authorities are getting more sophisticated and require advance electronic information for clearance and collection of duty
.

“3PLs that are investing in more automation and IT will attract more and larger customers,” says Coates. “In addition, 3PLs that have process engineers to design new services for customers will also win new business through the creation of innovative solutions.”



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

Spot market freight volumes for the month of August remained elevated compared to seasonal norms, according to data issued this week Portland, Oregon-based freight marketplace platform and information provider DAT.

Factors such as rising freight rates, shrinking capacity, an increased desire for global supply chain visibility, have all worked together to drive the need for instituting a culture of continuous improvement in logistics operations and transportation management systems (TMS). To meet today's complex logistics challenges, managers are stepping into a more streamlined, automated approach to transportation management in order to function at optimal levels both domestically and internationally. Read the latest special report.

The Atlanta-based company said that it plans to hire between 90,000-to-95,000 seasonal employees, up from about 85,000 last year, to support “the anticipated holiday surge” for package deliveries commencing in October and running through January.

The Memphis-based company reported today that quarterly net income of $606 million was up 24 percent annually, and revenue, at $11.7 billion, was up 6 percent. Operating income at $987 million was up 24 percent.

The World Shipping Council (WSC) released an update to its survey and estimate of containers lost at sea.

Article Topics

News · 3PL · Global · UPS · Logistics · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

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