Logistics Ceos Identify Top Supply Chain Industry Trends

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Logistics CEOs Identify Top Supply Chain Industry Trends Trends Include More Vigilant Business Practices, Industry Restructuring and Continued Commitment to Sustainability
By ZUBIN POONAWALLA, CEO, Zubin Poonawalla & Associates

The global economy continued to pose a challenge in 2009, with 48 percent of companies surveyed failing to meet revenue growth projections, while 80 percent of them still managed to be profitable. Pressure on 3PLs to share risk with their clients increased in 2009, with 28 of the 31 CEOs reporting that their companies now have performance-based contracts with many of their clients. Only five of the companies were involved in significant merger or acquisition activity in the year. Eighty-seven percent of CEOs noted that some of their manufacturing customers have begun to move toward near-shoring options in the past year, a trend that is expected to trickle down to 3PLs in the years to come. Labor numbers imply an upturn for 3PLs, with 87 percent of the companies beginning to rebuild their workforces in 2009. CEOs revealed that green practices are still a major priority in the 3PL market and 80 percent of the companies surveyed now have formal sustainability groups within their companies. "The CEOs involved in this year's surveys are more optimistic about growth prospects than they were last year, but appear to be more cautious about how growth will be achieved," commented Lieb. "They are likely to spend more time 'qualifying' new accounts, while devoting less attention to accounts in industries that are more cyclical in nature." "The last few years have caused global third-party logistics providers to reconsider the structure of their businesses within a shifting industry," said Gallick. "Many of the CEOs reported adopting new strategies that are more conservative in nature with respect to both market expansion and new service offerings." Further insights into this year's research findings are outlined in additional detail...