3PL Update: Analysts suggest global/domestic lines may be blurring

Subscriber: Log Out

Is the line between the top third-party logistics providers blurring? Analysts we recently spoke with think so. Richard Armstrong, chairman of Stoughton, WI-based Armstrong & Associates, noted that the industry mirrors what has occurred in the ocean carrier sector over the years.

"Does it really matter if you book cargo on a vessel that is based in Denmark?" he asked in an interview with SCMR. "It’s carrying containers from Korean and Japanese shippers, and may even be sailing under a flag of convenience. The national identity is gone, and the idea of doing business in a single national market is nonsense."

He also noted that U.S.-based multinational shipper, McDonalds, makes more money in foreign markets overseas.

"So that’s what’s happening to the paradigm," he says. "Most of the really big 3PLs are following the same model. To be purely domestic is to remain stuck in one place, and no one is going to sacrifice potential revenues to do that."

At the same time, however, Richard Armstrong insisted that some 3PLs are stronger in one region than another—and by that measure – the "domestic" category is still valid.

"But since the greatest growth is going to take place in India and China in the coming years, we are concerned about 3PL service in the U.S.," he said. "If it is all outsourced, this country will be a fading power…like Great Britain in the 20th Century."

London-based, Eyefortransport (EFT), may take issue with the historical allusion of this statement, but certainly not with the insight. Research done by the analysts for its "North American 3PL Market Report" suggest that a modest rebound must take place this year to keep this U.S. and its hemispheric neighbors in the game.

The report focuses on the opinions of logistics service providers (3PLs/4PLs), manufacturers or retailers, and supply chain technology providers, and offers comparative views between these groups of respondents. The report also pays particular attention to the state of the global economy, and other shipper concerns.

"The end of 2009 going into 2010 has been a time of challenges and opportunities in the supply chain and logistics industry," said Katharine O’Reilly, EFT’s senior vice president of research. "On the one hand the fall-out from the recession continues to rock all industries—yet on the other hand—the green shoots of recovery, and the opportunity to gain new market share and develop new, innovative strategies and relationships has opened up sections that were previously closed due to the relative stability."

SC
MR

Latest Podcast
Talking Supply Chain: The last-mile tech advantage
Last-mile delivery success depends on many aspects of the supply chain to work effectively together, but none is more important than the…
Listen in

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson

Patrick is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected].

View Patrick 's author profile.

Subscribe

Supply Chain Management Review delivers the best industry content.
Subscribe today and get full access to all of Supply Chain Management Review’s exclusive content, email newsletters, premium resources and in-depth, comprehensive feature articles written by the industry's top experts on the subjects that matter most to supply chain professionals.
×

Search

Search

Sourcing & Procurement

Inventory Management Risk Management Global Trade Ports & Shipping

Business Management

Supply Chain TMS WMS 3PL Government & Regulation Sustainability Finance

Software & Technology

Artificial Intelligence Automation Cloud IoT Robotics Software

The Academy

Executive Education Associations Institutions Universities & Colleges

Resources

Podcasts Webcasts Companies Visionaries White Papers Special Reports Premiums Magazine Archive

Subscribe

SCMR Magazine Newsletters Magazine Archives Customer Service

Press Releases

Press Releases Submit Press Release