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Home » 3PL CEOs Are Bearish on Growth But Hopeful About New Opportunities

3PL CEOs Are Bearish on Growth But Hopeful About New Opportunities

September 28, 2009
Penske Logistics

The 2009 3PL Provider CEO Perspective survey, presented last week at the Council of Supply Chain Management Professionals Annual Global Conference, reveals low expectations for a strong recovery in the coming months, though revenue projections are better than last year. Despite the continued impact of the global recession, CEOs express optimism about opportunities on the horizon and continue to invest in "green" initiatives.

The survey was conducted by Robert Lieb, professor of supply chain management at Northeastern University, and sponsored by Penske Logistics. It analyzed responses from 35 third-party logistics company CEOs across North America, Europe and Asia-Pacific whose companies were responsible for generating approximately $64bn in revenue in 2008.

"This year's survey results underscore the caution and anticipation felt by 3PL executives as they wait for signs of a global economic recovery," said Lieb. "Yet, despite bearish growth projections and acknowledgement that consolidation, pricing pressures and operational reductions were, and may continue to be, necessary adjustments, the opportunities for improved collaboration with customers, expansion into emerging markets and the possible addition of new management talent have many excited about the next several years."

"The past 12 months have posed unprecedented challenges for logistics providers around the world and yet opportunities for developing collaborative partnerships with customers have never been greater," said Vince Hartnett, president of Penske Logistics. "But in that time we have all learned a great deal and made business adjustments that have undoubtedly positioned the industry for steady growth and continued success as the economy rebounds."

Despite the global economic downturn, 3PLs have identified environmental sustainability and human capital issues among those worthy of continuing ongoing support.

Twenty-five of the companies involved in this year's survey reported launching new sustainability initiatives during the past 12 months, 22 have expanded existing sustainability programs and none reported scaling back "green" programs.

While 28 of 35 CEOs reported layoffs during the past year, 27 CEOs noted a reduction in recruiting efforts. There were 26 leaders who reported reduced executive trips to industry conferences. Only six noted a cut in employee training programs.

While the scale of the shift is small at this point, many CEOs surveyed expect that the trend toward reverse globalization and the shortening of supply chains will continue during the next several years.

CEOs surveyed in North America and Europe reported that, on average, nearly one-quarter of their customers had taken steps during the past year to shorten supply chains; the reported average was 9 percent in Asia-Pacific.

Twenty CEOs reported that some of their major customers had shifted manufacturing activities from Asia to North or Central America or Eastern Europe.

For access to the full executive summary, visit www.gopenske.com/newsroom/.

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