New Report Shows 3PLs Are Optimistic, Looking for Growth in North America

This year, the annual 3PL Market Report North America from eyefortransport focuses on the core issues supply chain and logistics companies are facing as they emerge from the global recession and as you might expect, the results are somewhat of a mixed bag, revealing a healthy dose of cautious optimism.

For instance, when asked how they think worldwide economic conditions will affect their companies' financial performance in the next 12 months, 36 percent of 3PLs, 47 percent of manufacturers/retailers, and 23 percent of solution providers said that growth will be slower than predicted.

But, 31 percent of 3PLs, 26 percent of manufacturers/retailers, and 29 percent of solution providers said they expect revenues to increase.

10 percent of 3PLs, 15 percent of manufacturers/retailers, and 23 percent of solution providers think growth will be as strong as predicted.

But, 17 percent of 3PLs, 7 percent of manufacturers/retailers, and 18 percent of solution providers said they are not likely to see growth, at all. 6 percent of 3PLs, 5 percent of manufacturers/retailers, and 7 percent of solution providers expect revenues to decline.

Overall, this year's results are generally more positive compared to eyefortransport's previous reports,though, indicating the increased optimism I've seen in other industries, as well.

When asked to identify the issues causing the most concern, survey respondents cited the economy and fuel prices, followed by a variety of other challenges, including rate negotiations with carriers, new environmental regulations, inflation, supply chain risk, visibility & tracking, network realignment, talent acquisition & retention, inventory management, and cargo security.

They survey also asked about how 3PLs are preparing for the economic rebound, and the results showed that most are planning to reduce costs through internal efficiencies (68 percent). Other top choices included: diversifying product offering (51 percent), expanding into new markets (48 percent), concentrating on core markets (40 percent), being selective with new customers (36 percent), hiring new talent (35 percent), strategic mergers and acquisitions (31 percent), asking for lower prices (28 percent) and ceasing to work on unprofitable accounts (28 percent).

Interestingly, the majority of 3PL respondents (72 percent) saw their greatest opportunities being in North America that's significantly higher than in the surveys from 2009 and 2008, when only 8 percent and 6 percent selected this region. China is still considered the most promising region by nearly half (47 percent) compared 51 percent in 2009 and 61 percent in 2008. But, expectations for India are down, with only 31 percent selecting it in 2010, compared to 44 percent in 2009 and 56 percent in 2008.

eyefortransport's 55-page 3PL Market Report North America 2010 is available for free download at http://events.eft.com/3pl/download-free-industry-report.shtml (Registration required.)