Logistics Management - June 2010

Special Report: Top 50 Global 3PLs
A SPECIAL SUPPLEMENT TO LOGISTICS MANAGEMENT
be shortened if the currency imbalance
continues to be an issue with China.
Near-shoring, he says, makes a lot more
sense if long-term and sustainable profits
can be realized.
“It’s going to be very interesting to
see if 3PLs will begin to concentrate
on businesses with production facilities
in North America,” says Armstrong.
“From a foreign currency exchange
perspective, it seems to make sense.”
Meanwhile, change in the 3PL sector
remains glacial, according to Armstrong.
With the exception of DB Schenker,
bold moves into new markets have not
been evident. “Schenker is somewhat
visionary,” says Armstrong, “in that it’s
growing its contract logistics at a very
rapid pace. Shippers should not assume
that this is being done across the board
with 3PLs.”
In fact, the biggest word of advice
Armstrong has for shippers this year is
this: Be reasonable.
“Don’t expect a lot of change in
service levels this year,” he says, “and
don’t rely on new providers coming into
the marketplace. Unless a multinational
manufacturer like Caterpillar comes into
the 3PL sector, it’s going to be the same
group of guys. The threshold for entry
is very high, and requires a big commitment
to operate on a grand scale.”
–Patrick Burnson is Executive Editor of
Logistics Management
The three
dimensions of
distribution
excellence
To achieve the potential of
distribution excellence, companies
need to think outside of the box and
optimize their 3PL partnership.
By Joachim Ebert, Kumar Venkataraman, Michael Hu
What allows certain companies to deliver
best-in-class distribution performance
while others turn in only average performance
or fail altogether
From our work in this area, we’ve
observed that the leaders in distribution—those that
deliver on a defined set of quality and service levels at
the best possible cost—consistently think outside the
box. They push their competitiveness to an efficiency
frontier, achieving a 15 percent to 30 percent distribution
cost advantage over competitors while delivering
equal or better service levels.
Some of these leaders go a step further and leverage
successes in distribution optimization as a catalyst
to improve performance across the entire value
chain—from demand planning to logistics—both to
improve the top-line and unlock additional savings.
We characterize the approach as “3D” outside-thebox
thinking because it requires the following three
dimensions: Benchmarking beyond industry boundaries,
challenging preconceived views, and triggering a
chain reaction in supply chain optimization.
54S June 2010 • Logistics Management