Supply Chain Managers Will Have More 3PL Options in 2017
Although carrier overcapacity on the still continues, analysts predict that integrated solutions such as air-ground, air-sea, and other combinations will create more value for shippers and increase 3PL margins.
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Technology risk has been shifting from shippers to 3PL providers in 2016, and the trend may gather speed in the coming years, says Evan Armstrong, president of Armstrong & Associates.
As noted in here recently, the consultancy shared these insights and others gleaned from the 3PL Value Creation Summit held in Chicago last month.
“International Transportation Management (ITM) is expected to maintain slow growth with overall net revenue of 4-5%,” says Armstrong. “But given the fact that global trade may be more complicated once a new Administration is in place in Washington, more demand for ITM may become evident.”
Although carrier overcapacity on the still continues, Armstrong predicts that integrated solutions such as air-ground, air-sea, and other combinations will create more value for shippers and increase 3PL margins.
“Meanwhile, domestic transportation management to support manufacturing and eCommerce (last mile) has above average growth,” says Armstrong.
He adds that domestic transportation management is the strongest of the four major 3PL segments.
Finally, says Armstrong, eCommerce is driving growth, with Omni-channel fulfillment strategies still in vogue.
“We don’t see that changing in 2017,” he says.
About the AuthorPatrick 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 [email protected]
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