World Trade - November 2008 - (Page 25)

COVER STORY the increasingly competitive rail business, supply chain companies offering rail transport, intermodal, drayage, and short haul trucking are well positioned. Regional 3PLs A fourth winner will be regional contract logistics and supply chain providers, such as warehousing and value-added service providers and contract packagers. Each year, the International Warehouse Logistics Association (IWLA) surveys its members, comprised of over 500 3PL and warehousing companies, and shares data in its Annual Business Outlook. In its 2008 survey, over one-third of the respondents said they expect to experience growth of over 10% in 2008, and approximately 13% expect to see sales increases of 20% or more. 28 % expected solid growth for valueadded services, including packaging, pick and pack, and labeling. The IWLA report afﬁrms that the outlook is bright for warehousing 3PLs despite a slowdown in other sectors. BGSA anticipates that the contract packaging industry will also expand from increasing domestic supply chain activities. Our analysis indicates that contract packaging is an approximately $20 billion market exhibiting 10+% annual growth. Increasing fuel prices could potentially stoke the need to couple packaging capabilities with We are on the precipice of a major change sweeping through the supply chain: near-sourcing. Like its predecessors, it has the potential to create new classes of winners and losers. warehousing and distribution. In a weak economy, companies often prefer to focus on core competencies, such as marketing and branding, as opposed to non-core competencies, including manufacturing and outsourcing. This is more good news for regional providers of contract logistics and contract packagers. Other Geographies In addition to Mexico and the U.S., other countries are expected to better compete with China’s increasing manufacturing costs. As China develops, other markets are becoming lower-cost competitors, such as Mexico, Thailand, and Vietnam. The performance of industry bellwether Expeditors is again reﬂective of this trend. The company reported that revenue increased 28% in Mexico, 11% in Canada, and 51% in Latin America, which was attributed to “strengthening export volume growth.” Domestic freight forwarding and customs brokerage companies that expand in these low-cost and/or North American markets will reap rewards. LOSERS Some supply chain businesses will experience weakened demand as a result of trafﬁc changes due to nearsourcing. WWW.WORLDTRADEMAG.COM 25 http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - November 2008

World Trade - November 2008 Contents Unexpected Responses to Unanticipated Change Reading the States of Risk in Today’s Global Economy Supply Chain Watch Tradewinds Failed Promise: Mexico and NAFTA, 15 Years Later The Short Tale Marrying Trade Finance and Transportation into a Single Transaction Trucking Gets a Double Whammy Are We Safe Yet? Logistics Resurrects the Rust Belt Keep on Compressing

World Trade - November 2008

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