Third-party logistics service providers are more optimistic than ever about their future Ö and not without cause. A recent survey showed that nearly one-third of 3PL providers expected double-digit growth in sales in 2005. And in contrast to last year, when 20 percent said they expected sales to drop, only 7 percent of the respondents to this year's survey predicted that sales would decline. Those findings were part of the IWLA's Industry Outlook 2005 report, which was presented during the group's annual convention in Orlando in March.
"Requests for proposals are coming in at an enormous rate, representing all kinds of companies with all kinds of products and services," says Ann Drake, CEO of DSC Logistics. "That indicates that the concept of strategic business process outsourcing is a reality, and that companies are realizing that professional logistics firms really do know how to do it better and apply process experience to a new business."
It appears that the 3PLs expect growth across nearly all areas of their business. When asked which services would take off in 2005, they mentioned assembly operations, cross-dock warehousing, contract warehousing, import and export services, pick/pack operations and public warehousing. 3PLs also expect strong growth in their transportation offerings, including freight brokerage operations and trucking and transloading services.
That's not to say everything's perfect in the third-party world. 3PLs also reported some concerns. They include rising fuel costs, a particular concern for those companies that provide transportation services, and soaring health care costs, which hit smaller players especially hard. Making matters worse, 3PLs report that customers continue to ask for additional value-added services but aren't willing to pay for them. While some expect to get the added services at no extra cost, the 3PLs say, others actually expect prices to drop.
Gartner, Inc.