Given the tumultuous business environment of the past six months, shippers will face serious competitive challenges in 2009. The global economic debacle, security demands and pressures to ensure greener supply chains will be major drivers of change in the transportation industry as companies seek to right the ship.
Thomas Edison’s quote, “Vision without execution is hallucination,” has recently been reworked by business entrepreneur Rod Boothby, who states, “Execution without vision should get outsourced.”
We will see a significant increase in outsourcing of logistics services to 3PLs in 2009. We also will see many logistics service companies race to enter the 3PL and 4PL space as the basic logistics services are not core commodities, but services that are primarily price-driven.
The major outsourced logistics services will be domestic and international transportation, warehousing, customs clearance, brokerage and forwarding. IT capabilities of service providers will be increasingly seen as critical to the integration of logistics services provided by 3PLs. The foundation of the theory of supply-chain management is that, to be successful, supply-chain processes and activities must be integrated. This means all systems need to talk directly to each other on a real-time basis.
The 3PLs that have been developing and investing in technologies that provide an integrated service that not only spans the traditional services of transportation and warehousing, but also include procurement, fulfillment, green initiatives and security will have a competitive advantage in this business environment.
The issues that challenge our industry in 2009 are formidable. The new demands from the market, the government and internal stakeholders will force logistics companies to ensure that their supply-chain visions are accurately aligned and then properly executed on behalf of their customers or face extinction.