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

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent.

With a 1.1 cent drop to $3.858 per gallon, this follows declines of 2.5 cents, 1.9 cents, and 0.7 cents over the previous three weeks, with the cumulative four-week decline at 6.2 cents.

Second quarter revenue for transportation and logistics titan UPS headed up 5.6 percent annually at $14.3 billion, while operating profit sank 57.1 percent to $747 million. Quarterly net income fell 57.6 percent to $454 million.

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

Freight transportation and logistics services provider Averitt Express recently announced it has rolled out improved transit times for less-than-truckload (LTL) service from the Midwest to Toronto and other cities.

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