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Research firm Armstrong & Associates (www.3plogistics.com) reported that most third party logistics providers (3PL) experienced improved financial performance in 2010 and into 2011. In its annual report released May 20, 2011, Armstrong & Associates noted that while both revenues and profits of 3PL's were generally higher during those time periods, the trend was strongest in the international transportation management segment.
Meanwhile, in an unrelated report, the Los Angeles Economic Development Corporation recently predicted that the volume and value of international trade in the Los Angeles Customs District (including the Long Beach Port, which has long been...
Here are a few tips for manufacturers and other consumers of third party logistics (3PL) services to consider when drafting their next 3PL contract, to minimize transition issues, regardless of whether transitioning to another provider or in-house:
- The transition from your incumbent 3PL to another provider, or from your incumbent 3PL back in-house, is a process - even in relatively basic 3PL arrangements, the transition can often take several months. More importantly, the transition will require the incumbent 3PL to work closely with you and any successor 3PL to ensure that your supply chain is not interrupted. Of course, the incumbent 3PL has its own concerns, such as redeploying employees and equipment in a timely manner, and minimizing "end-of-contract" expenses. It is therefore wise to include a "transition" clause in your 3PL contract, setting forth in reasonable detail those additional duties required of the incumbent 3PL as part of the transition process...
While the United States has been generally ahead of the curve in beefing up security as to cargo transported on passenger planes within the US, the risks involving cargo bound for the US from other countries remains substantial, as highlighted by the recent incidents involving cargo originating from Yemen. It's one thing for TSA to implement and enforce rules relating to cargo security within the US, but it will be very difficult to implement and sustain an effective screening process in foreign countries...
In mid-October 2010, the Houston Chronicle reported that breakbulk export shipments — cargo which is not "containerized" or shipped in bulk — were expected to rise at the Port of Houston in 2011, following two years of steep declines. That would be consistent with national trends, such as at the Port of New Orleans, where breakbulk exports were recently reported to be up 15.3 percent over the same period in 2009. It appears that much of the increase can be attributed to pent-up overseas demand...
U.S. Gross Domestic Product (GDP) was recently revised downward from a seasonally adjusted annual rate of 3.0% to 2.7% for the first quarter of 2010. Standing alone, this is sobering news for the U.S. economy, after an encouraging 5.6% reading during the fourth quarter of 2009. But this reduction has particular relevance to the transportation and logistics industry.
Wal-Mart announced in mid-June 2010 that it is considering pulling business from its outsourced transportation providers (including, potentially, Swift Transportation, Con-way Freight and Greatwide Logistics) with respect to delivery of goods from suppliers to its distribution centers, and instead moving that freight using its in-house private fleet, wherever it is cost-effective to do so. According to a Bloomberg report...
The Council of Supply Chain Management Professionals released a report in late June 2010 entitled "The Great Freight Recession", which stated that U.S. business logistics costs plummeted to $1.1 trillion in 2009, a decrease of $244 billion from 2008. In addition, the report noted that in 2009, "U.S. logistics costs as a percentage of Gross Domestic Product (GDP) hit a record low of 7.7 percent, the lowest point ever recorded in the 30 years...