3PL Survey Projects Continued Growth
This story appears in the Oct. 17 print edition of Transport Topics. Click here to subscribe today.
Logistics executives believe their businesses will continue to grow, while pressures to find new product sourcing options and talented workers will increase, a new survey has found.
The report, sponsored by Penske Logistics, was issued Oct. 5 during the Council of Supply Chain Management annual meeting.
The report is based on responses and commentary from CEOs at 36 firms globally, nearly all of which appear in the Transport Topics Top 50 list of the largest logistics companies in the United States, Canada and Mexico. The companies’ combined third-party logistics revenue was $58 billion in 2010, or more than 40% of the overall logistics market estimated by the consulting firm Armstrong & Associates.
“Many 3PL clients will reassess sourcing strategies, inventory commitments and the future extent of their commitment to ‘lean’ and ‘just-in-time’ principles,” the survey found.
In addition, the executives said they expect continued revenue growth, more use of social networking tools and expansion of services into Central America, South America and Africa.
Growth projections were strongest in Asia, where 16% are forecasting increased business next year, compared with 11% in North America and 8.4% in Europe.
Worries about a lack of management talent were noted in all three regions, as was concern about future economic conditions. The CEOs also expressed concern about a shift in production from Hong Kong and southern China to areas such as western China.
Another key point in the survey was that, in total, 88% of the companies surveyed met or exceeded their 2010 revenue projections, up sharply from 50% in 2009. Growth was strongest in Asia and North America.
The survey also confirmed the effects of the twin Japanese tragedies — earthquake and tsunami — in March 2011. One-fourth of the CEOs of North American 3PLs said customers lost sales because of those calamities. Fully half of surveyed Asian CEOs said they lost business as well.
In North America, firms believed the ability to demonstrate sustainability initiatives was a positive force to differentiate their companies in the market.
Annual revenue growth projections in North America were about 8%, little changed from the year before, and 6% in Europe, which also was little changed. Asian logistics officials projected the strongest revenue growth — about 10%. However, that estimate was down from the prior survey, when a 15% increase was envisioned.
