Transportation & Logistics Update
Key Trends In The Industry
At the recent 3PL Value Creation Summit, industry experts discussed the meteoric rise of e-commerce in Asia, driving changes in the 3PL landscape:
- E-commerce: Fastest growing 3PL sub-segment
- 3PL Growth: China, India, and Southeast Asia as key growth countries / regions
- Technology / Automation: Providers continually striving to streamline operations and innovate systems and applications
- Domestic Warehousing / Transportation Management: E-commerce driving growth, particularly with cross-border e-commerce booming in China
Those trends were observed first-hand by Managing Directors Jason Bass and Daniel Wang and Director Jeff Burkett during recent meetings with executives from leading global T&L companies based in China. Get their key takeaways on what Chinese T&L companies are looking for, Chinese entrepreneurs, and how government actions impact M&A dynamics.
What We’re Reading
In trying to stay competitive, 3PL providers are tapping into automation technology to eliminate manual tasks, boost productivity, and improve customer satisfaction. The World Economic Forum and Accenture state there is $1.5 trillion of value at stake for 3PL players, and a further $2.4 trillion worth of societal benefits, as a result of digital transformation.
Trucking companies are adding capacity to handle the growing number of shipments as rising freight prices and gains from the new tax law provide more cash for capital spending. Kenny Vieth, President of the ACT, said: “This is an astonishing rate of order placement. What’s facilitating it is that truckers are absolutely crushing it on freight rates.”
A recent Federal Railroad Report (FRA) quoted: “Population and demographic trends pose an enormous challenge for U.S. transportation infrastructure…urbanized areas will increasingly converge into larger networks of metropolitan areas called “megaregions.” The railroad system will reduce the negative impact of this major population consolidation. One solution: intermodal. The FRA states that with improvements in service and facilities, rail intermodal will become more competitive and absorb the projected increases in freight movement.
American ports are witnessing rapid growth in the export of partly-assembled vehicles as cars exported in partially-assembled form – known as “knockdown” kits – are subject to different, often lower, levies than full cars. This is an alternative approach adopted by automakers to counter new trade tariffs.
The U.S. has launched its long-awaited Air Cargo Advanced Screening (ACAS) program, intended to address ongoing aviation security threats and add an extra layer of security for inbound carriers and forwarders.