Logistics in China

As logistics professionals we typically deal with China significantly more than most other professions. China has been, and will continue to be, one of the most important traders in the world. Therefore, it is of utmost importance that we make sure that our communications run smoothly in order to secure the most efficient logistics processes. “How difficult can that be?” – you might be asking. Good communications with China are not difficult, considering that there are thousands of emails and calls daily between the West and China. However, there are key factors that are important to understand about the Chinese culture, so we can make the most out of our communications and relationships.

 

china-logistics

First of all, we have to understand that there is a big difference in the thinking structure of our Eastern stakeholders and us – the Westerners. There are studies about dialectical thinking, which explain those differences in thinking structures. A particular study by Nisbett in The Geography of Thought, states that the dialectical thinking for Westerners involves having a contradiction resolution as the goal, while for the Chinese the goal is to use contradiction to understand the relation among situations or things, and to integrate oppositions.  As an example in the Western world, we typically view contracts in a much more rigid light, whereas in China for many a contract is seen as just as the beginning of a business partnership and subject to interpretation.

 

Also when communicating in English always work to keep communications simple and effective and not assume that everyone is 100% fluent. The most important recommendation is to keep your messages structured, and use bullet points and lists. Instead of three questions in a paragraph, send three paragraphs, and mark each one as an item.  Then, it becomes easier for everyone to read and to answer each question. It is a simple way to start but an effective one.

 

It is also highly recommended that if you are going to partner with businesses in China that you schedule regular in person visits (at least quarterly) to vendors and 3PL providers in China. As with all business there is never a substitute for in person meetings to build relationships and ensuring adherence and adoption of policies.

 

Logistics in China is only going to continue to grow in importance. Over the next 10 years as we begin to see China’s economy shift away from manufacturing and into a service based economy, a growing upwardly mobile middle class will create countless opportunities for those specializing in supply chain management and logistics.

Ecommerce: Logistics & 3PL Trends for 2016

With the ascendance of Amazon, major Ecommerce players and changing consumer/B2B purchasing behavior; the logistics landscape is forever changing

According to a recent study by ComScore 78% of of the US population purchased an item online last year and that is only expected to increase. And with the rapid expansion of same day delivery and even delivery within 1-3 hours, ecommerce is changing what logistics is capable of, while opening up major opportunities both for manufacturers, marketers and 3PL companies to better connect with their clients.ecommerce logistics 2016

Today on average e-commerce accounts for 11.85% of North American 3PLs’ revenue, according to the 2016 3PL Study. The CEOs of the leading 3PL companies project that in the next year this will increase to more than 20% of overall revenue with the continued focus and importance on next day delivery and the partnering with 3PL’s for last mile delivery. At the same time a growing share of last mile service is also starting to be taken over by the “sharing economy” with initiatives such as Amazon Flex and companies like Uber getting into the delivery space.

Another major area of growth noted in the study is international e-commerce. For example European ecommerce accounted for around 5% or North American 3PL revenue, but is projected to grow to 9 percent in the next three years. The APAC region will also continue to explode in the coming years as well. (China’s current economic woes notwithstanding)

There is a tendency to see the biggest opportunity being having the opportunity to partner with Amazon. That said longer term, ecommerce companies are looking to build out their global supply chains outside of Amazon and move to direct to consumer models. Especially in these formative years, 3PLs will play a major role in helping companies expand in their international market coverage

What are the keys to ecommerce success for logistics companies moving forward? An increased focus on providing innovative order fulfillment services, keeping up to date with the nimblest logistics software and providing reliable, disciplined same day delivery services.

It is an interesting time to be in the logistics industry for sure!

3PL Industry Growth 2015

For years industry insiders have predicted that the logistics sector is on the brink of commoditization, relegating 3PL companies to mainly short-term contracts for execution based services at the lowest price. While this is a trend happening in many industries and certainly the logistics industry is seeing some of this, the reality is more complex. Drastic shifts in the business landscape and technology have led more companies than ever to outsource their logistics activities and the services and expectations of logistics service providers in warehousing, trucking, and integrated providers have never been higher.

According to recent estimates by Armstrong and Associates, the cost of logistics services accounts for 8.5% of United States GDP, 9.2% for Europe, 11% of South America and more than 17% for Greater China.

Third Party Logistics revenue is estimated to increase 6.4% from 2013-2016.

The biggest industries projected to be key drivers of this growth:

  • Industrial- 10.6%
  • Healthcare – 8.9%
  • Technology – 8.6%
  • Foods/Grocery – 8.2%

With the dynamic nature of logistics and the increasing needs of organizations to manage their supply chains, the 3PL industry seems poised to continue its expansion.

The 20 Busiest Container Ports in the World

As supply chain and logistics activity continues to pick up speed worldwide we are seeing aggressive surges in traffic in the APAC region over the last decade. China, Port of Shanghai9 out of the top 20 busiest business container ports are based in China. Curiously only 1 out of 20 of the busiest ports is based in the United States with the Port of Los Angeles coming in 16th.  Singapore continues to be a major container port coming in 2nd, but Shanghai has been continuing to grow and will likely remain the World’s largest port for the foreseeable future.  Note: Traffic measurements are conducted in TEUs or “twenty foot equivalent unit” (the closest measurement to the size of a standard shipping container.)

The Busiest Ports in the World 

Rank Port Country TEUs
1 Shanghai China 32,530
2 Singapore Singapore 31,650
3 Hong Kong China 23,120
4 Shenzhen China 22,940
5 Guangzhou China 17,740
6 Busan South Korea 17,040
7 Ningbo-Zhoushan China 16,830
8 Qingdao China 14,500
9 Dubai United Arab Emirates 13,300
10 Tianjin China 12,300
11 Rotterdam Netherlands 11,866
12 Port Klang Malaysia 10,001
13 Kaohsiung Taiwan 9,781
14 Hamburg Germany 8,863
15 Antwerp Belgium 8,635
16 Los Angeles United States 8,078
17 Dalian China 8,063
18 Tanjung Pelepas Malaysia 7,494
19 Xiamen China 7,202
20 Jakarta Indonesia 6,217

3PL Industry Study 2012

The 16th annual 3PL industry study was released at this year’s CSCMP conference in Philadelphia. With more than 1600 shippers and 700 representatives from 3PL companies this years study covers the current state of the third party logistics market, emerging logistics markets, high tech/electronic, talent management and strategic assessment.

Key findings are that 64% of shippers from trucking, to rail, and ocean are increasing their use of 3PL services and an average of 42% of total logistics expenditures are spent on logistics outsourcing. At the same time, 24% of respondents reported a return to insourcing 3PL solutions and 58% report they are reducing or consolidating the number of 3PLs they use. Today’s 3PL marketplace is experiencing significant change and established 3PLs are adjusting their business models to provide greater value to customers. The report still shows a desire among shippers for third party logistics providers to improve their IT and technology offering to allow better visibility into inventory.

Current state of the market:

“While 69% of shipper respondents are satisfied with the openness, transparency, and communication received from 3PLs, only 62% of 3PLs are satisfied with these characteristics in their relationships with customers.”

Electronics:

“74% of electronics companies cite visibility as the top service they would like to see from 3PLs, no matter the size or location of the shipper.”

Talent Management: 

“41% of shippers and 36% of 3PLs are concerned or significantly concerned that their organization has a number of stars, but their culture/history has not encouraged them to work collaboratively as a team (team effectiveness).”

The 2012 3PL study was supported by:

  • Capgemini
  • Penn State
  • Panalpina
  • Heidrick & Struggles
  • Eyefortransport

Largest 3PL Companies 2010

Logistics Management recently spoke with Dick Armstrong of logistics consulting firm, Armstrong & Associates, who recently announced the top 5 biggest North American 3PL companies by warehousing space in 2010.

Top 5 Largest Third Party Logistics Providers

  1. DHL Exel Supply Chain – 94.6 million sq. ft. of warehousing space
  2. Jacobson Companies – 35 million sq ft. of warehousing space
  3. GENCO – 34.7 million sq. ft. of warehousing space
  4. Ozburn Hessey Logistics – 30.1 million sq. ft. of warehousing space
  5. Caterpillar Logistics Services – 29 million sq. ft. of warehousing space

Source: Logistics Management

4 New States Added to 3PL Directory

To ring in the beginning of 2010, we have again expanded Logistics List into 4 new states in our continued mission to expand the depth of our leading 3PL directory serving the warehousing, transportation, and distribution industries.

The new states added to Logistics List include:

Florida & New York added to 3PL Directory

In our continued expansion into additional regions, we are happy to announce the addition of new extensions to Logistic List’s regional offerings covering logistics companies in Florida (focusing on 3PL providers in the FL marketing including Jacksonville, Orlanda, Miami, and Tampa) as well as a long overdue section for New York 3PL companies for logistics providers serving the greater New York area.

Also for you folks that are into social media we also would like to announce our arrival on twitter. Feel free to follow us @logisticslist. If there is a state that you think we should add next to our logistics directory please let us know.

3pl Study 2009

This year’s annual 3pl study sponsored by Oracle, Capgemini, Georgia Institute of Technology and Panalpina was just recently released.

Since its inception 14 years ago, the Annual Third Party Logistics study has documented the growth and evolution of the 3PL industry.

The 2009 3PL study includes four streams of research:

  • a web-based survey
  • workshops with shippers
  • leveraging the Capgemini Accelerated Solutions Environment
  • focus interviews with industry executives.

To request a copy of the full study click here

New Regional 3PL Directories

We are pleased to announce the launch of two new regional directories at Logistics List covering Logistics Companies in Texas and 3PL Providers in Ohio. Our mission is to continue building out our directory to serve all of the major markets for warehousing and transportation services. While a good number of the logistics companies listed have a national presence it continues to be valuable to our visitors to be able to drill down and get a list of leading 3PL’s in each individual market.

If there is a state that you are looking for that we don’t presently cover look out in the coming months as we begin to add new states to our directory. [Read more…]