3PL providers continue to strategize on how to work with or against Amazon

E-commerce has become a growth driver in all 3PL segments and working with or against Amazon remains a hot topic, notes Evan Armstrong, president of the consultancy, Armstrong & Associates. 

As we observed in previous blog posts, the focus again was on coping with supply chain volatility. When the consultancy, Armstrong & Associates staged its 7th annual 3PL Value Creation North America Summit in Chicago last month.

“Panelists agreed that e-commerce remains a strong growth driver for the third-party logistics industry, even amongst ongoing tariff concerns, said Armstrong.

The consultancy estimates 2018 U.S. e-commerce logistics costs were $141.6 billion, with no immediate signs of a slowdown. 

“E-commerce presents many opportunities for 3PL providers, and is also bringing omnichannel business with it,” said Armstrong. “Furthermore, it can result in higher margins for 3PL providers, and its volatile volumes play well for non-asset-based companies.

According to Armstrong, manufacturers and 3PL providers continue to strategize on how to work with or against Amazon. Many are following FedEx’s challenges after its recent decision to discontinue direct business with Amazon.

“Another move to watch is Amazon’s purchase of customs broker and technology startup, INLT,” he said. “The addition of INLT allows Amazon’s marketplace to more effectively navigate customs clearance on international shipments.”