UPS Addresses New 3PL Challenges in “Mega Cities”

Will market forecasting play a larger role in the 3PL marketplace as providers try to help shippers determine where new opportunities may surface?
By Patrick Burnson, Executive Editor
June 19, 2013 - SCMR Editorial

Editor’s Note: Alan Amling, UPS global director contract logistics marketing, was recently interviewed about new trends in the third-party logistics marketplace. His answers reveal and address a new layer of complexity in supply chain planning.

Supply Chain Management Review: Will market forecasting play a larger role in the 3PL marketplace as providers try to help shippers determine where new opportunities may surface?

Alan Amling: A key value that 3PLs can provide shippers is market knowledge across multiple regions and industries. Another value is to help companies take advantage of the growth opportunities they decide to pursue. Not only do some global 3PLs, like UPS, have existing infrastructure in global markets, they also have the in-country expertise to help companies navigate trade regulations, get products to end customers and provide post-sales services.

SCMR: What part will “mega cities” play in shaping the destinies of top 3PLs?

Amling: Supply chains start when someone, somewhere reaches for their wallet. Increasingly, this will happen outside the U.S. in these mega cities. Today, China has about 90 cities with more than 250,000 middle class consumers. By 2020, China will have more than 400 cities with a quarter million middle class residents – 50 will have more than a million! As companies position to capitalize on this demand, their 3PL partners need to ensure they have the right infrastructure and expertise in place to facilitate these business strategies.

SCMR: Can the top domestic players afford to avoid going global?

Amling: If the 3PL strategy is to provide an end-to-end experience for shippers, they cannot afford to avoid going global. 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 is a lot of opportunity in the market and putting up a global network may not be the right move for all 3PLs. There will continue to be opportunity for local and regional providers to be integral components of company supply chains. The real question is with 95% of the world’s consumers now outside the U.S., can domestic businesses 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

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.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) recently reported that its Freight Transportation Services Index (TSI) dipped 0.9 percent from May to June.

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.