FIGURE 3 Logistics Solutions 3PLs Offer
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Many companies
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now use multiple
3PLs to manage
SOURCE: IL 3PL Market Insight Survey, 2007
regional operations,
The majority of 3PLs offering global services are taking the latter approach – 81.3 percent of partici- pants indicate they own facilities outside the United States. Large 3PLs that specialize in ocean and air- freight forwarding are likely to have more offices in more places – 17.3 per- cent of responding global 3PLs report operating more than 100 interna- tional facilities. Smaller 3PLs are growing their global presence in a more organic way, following specific customers or vendors into new markets, with 36.5 percent of respondents indicating they maintain less than 10 off- shore locations. The majority (46.2 percent) of global logistics service providers fall somewhere in the mid- dle, operating between 10 and 100 international sites. The expansion of global supply chains, and the proliferation of 3PLs capable of managing specific func- tions and operational areas within the demand/supply network, give manu- facturers and retailers an abundance of outsourcing options. Many compa- nies now use multiple 3PL partners to
manage and control specific regional operations, niche verticals, or special- ized logistics needs. This trend has accordingly par- alleled growing demand for service providers that offer lead logistics and 4PL capabilities – 76.7 percent of respondents report such capacity, a 6.9-percent increase over last year ( see Figure 3, Logistics Solutions 3PLs Offer ). Offshoot of Offshoring Offshoring has alternately required companies to reconsider their state- side distribution networks to better integrate the inbound flow of product through import facilities, stream- line transportation moves and total landed costs, and better match demand to supply. Varying capacity and congestion concerns at U.S. West Coast ports, in particular, have some stateside consignees routing ship- ments through Mexico and Canada, and growing NAFTA volumes are contributing to this dynamic. This trend reflects the fact that 40.9 percent of surveyed 3PLs focus solely on North America, and U.S.- only service providers are shrinking
niche verticals, or
specialized logistics.
That creates
growing demand for
4PL capabilities.
102 Inbound Logistics • July 2007
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