3PL Industry to Continue Double-Digit Growth
By MaterialsHandling.Net Staff
Date Posted: 5/1/2007
Forecasts by the International Warehouse Logistics Association (IWLA) indicate that the boom in the outsourced logistics business should continue. Known as third-party logistics (3PL), the sector is being impacted as companies focus more on core competencies and international trade increases.
More than half of
“In the first quarter, we’re double-digits ahead of last year. We’re very encouraged by how 2007 has started,” stated Linda Hothem, chief executive of Pacific-American Services.
More than half of the 3PL companies surveyed indicated that they would add employees this year. 3PLs expect solid growth potential in the following industries:
food and beverage, grocery, paper and related products, retail/general merchandise, pharmaceuticals, and computers/high tech.
As manufacturers try to become as lean as possible, increasingly these companies are focusing solely on their core competencies while outsourcing warehousing, logistics and transportation functions. More international business means longer supply chains with more intermediaries.
Joel Anderson, president of the IWLA, said, “Third-party logistics is being recognized as an industry that’s making money. It’s developed a track record of strong growth and an expectation of strong growth.”
The growth of 3PLs has led to mergers and consolidations. This has also attracted venture capital firms and investors looking to get in on the 3PL wave.
As pallet and packaging companies look for ways to extend their relationships with customers and provide new services, a variety of functions done by 3PLs may be the answer. This includes handling reverse logistics functions, warehousing, re-packaging, package design, transportation, trucking, etc.
3PL functions can be done by some pallet companies with expertise in dispatching, recycling, warehousing, package design, etc. Each company must decide what it does best and figure out how it can take those strengths and use them to solve customer problems.
