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Jim McAdam

The tsunami in Japan and flooding in Thailand showed how fragile global supply chains have become. Manufacturers and retailers will seek out ways to insulate themselves from future disruptions as they cope with setting new market priorities and reducing costs. Opportunities exist for 3PLs to consult with their clients, re-engineer their supply chains and to implement initiatives that deliver these objectives in an optimal manner. Supply chain performance will increasingly be evaluated on four dimensions: cost, customer service, sustainability and risk.

Traditionally net producers, several emerging markets gradually are transforming themselves into significant consuming markets too. In addition to export-flow logistics, 3PLs will see expanded opportunities for import-flow logistics as well as domestic warehousing and distribution in 2012. Despite the gaps in local infrastructure and logistics expertise in these markets, customers will be demanding that 3PLs provide First World solutions. This will lead to international 3PLs investing strongly in technology, training, infrastructure and assets.

Economic slowdown in the mature markets will prompt more collaborative partnerships, even among competitors. For example, three competing automotive OEMs today achieve cost savings by sharing some aspects of supply chains. The coming year will see more 3PLs collaborating with each other to gain scale economies and efficiencies as market volumes stay flat. Those who elect to postpone the design and implementation of these supply chain initiatives, waiting instead for a return to the normal years of the middle of the last decade, will become marginalized and competitively disadvantaged.