Who will control the majority of the freight, and therefore invest the most in supply chain technology, in 2012? Our answer: the third-party logistics provider.
There are two significant reasons for this. First, the dire financial outlook has ocean carriers scrambling for survival, slashing services and cutting back on all non-core operations. Ocean carriers just don’t have the money to spend. Second is perhaps longer-lasting trend: Ocean carriers are consciously abandoning door-to-door service. 3PLs are stepping into the vacuum.
In four years, the share of North American landside operations controlled by ocean carriers has dropped from 70 percent to 30 percent. Beneficial cargo owners or their designated 3PLs now manage the landside logistics for nearly three-quarters of all North American NAM inbound movements.
This change isn’t just happening around the so-called last mile. The trend is gathering pace at the other end of the supply chain in Asia. Goods that once would have been loaded at factories close to the carriers’ terminals in Shanghai and Shenzhen now increasingly are being packed thousands of miles inland, in places such as Chongqing and Wuhan. As the factories relocate inland, it’s the 3PLs that are expanding their expertise to assist.
As control shifts, there is a more critical need for technology systems to manage the vastly complex intermodal supply chain. The key to 3PLs’ success will center on the systems they adopt to manage it.