Exclusive Interview: industry expert shares forecast on global 3PL sector

Cathy Morrow Roberson, Founder & Head Analyst for Logistics Trends & Insights LLC – a boutique market research firm that specializes in global supply chains – recently shared her observations on the current state of the global and domestic Third-Party Logistics (3PL) industry in this exclusive interview. 

Logistics Management: Were any particular 3PLS hurt by the trade tensions between the U.S. and China in 2019?

Cathy Morrow Roberson: I would be surprised to hear of any major 3PL not impacted by trade tensions between the U.S. and China in 2019. Freight forwarding and intermodal volumes, on average, declined. Those 3PLS that did not have a balanced portfolio of services probably were more negatively impacted.

LM: While it’s probably too early to tell, what impact will COVID-19 have on global and domestic 3PLs?

Morrow Roberson: So far it looks like much of the demand for goods is coming from larger shippers as many small-to-medium-sized businesses struggle to reopen. As manufacturing slowly reopens, there will be some pick up in 3PL activity such as warehousing and distribution. Growth in e-commerce logistics will also continue as consumers, accustomed to ordering while confined to homes, will continue to order items online. However, the COVID-19/recession impact will hit 3PLs’ profits for at least the first half of the year, if not longer. 

LM: Have you seen any major shifts in modal decisions by global 3PLs? More ocean, less air, for example?

Morrow Roberson: Tight air cargo capacity has resulted in some modal changes. For example, rail between Asia and Europe. DHL has added additional rail containers to meet demand for this solution. Some providers are also utilizing trucking between Asia and Europe. Multimodal options such as sea/air are also being used more as well as ocean for goods that usually move by air. 

LM: For domestic players, is there a trend for more cross-border and on-shoring concentration?

Morrow Roberson: Cross border activities continue but I think there may be more considerations for on-shoring as we move past COVID-19 particularly, as it relates to the pharma/healthcare supply chain.

Tomorrow: Part II