UPS Addresses New 3PL Challenges in “Mega Cities”

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?

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