Experts differ whether developing world 3PLs will join top 10

AMERICANS and Europeans provide all but one of the top 10 third-party logistics providers today, but developing countries will join the front ranks in the next 10 years, says CEVA Logistics chief executive Logistics John Pattullo.

"It's inevitable that there will be Chinese, Brazilian or Indian 3PLs that become important global providers," he said. "It's bound to happen."

No so, says former Schneider Logistics president Tom Escott, who told American Shipper that this prediction was unlikely because most big corporations prefer western 3PLs.

Speaking on the sidelines of the recent Council of Supply Chain Management Professionals annual conference in San Diego, CEVA's Mr Pattullo was elaborating on a point he made earlier to delegates. His UK-based CEVA Logistics is the fifth-largest global 3PL, producing revenues of US$7.64 billion at year.

As an example of a company that would make the 10, Mr Pattullo pointed to his joint venture partner Anji Logistics in China, and other likely candidates in Brazil.

As it stands, DHL is top dog with $32.5 billion in revenue in 2009. Japan's Nippon Express ranked among the largest 3PLs last year, but it is a regional and not a global company with 87 per cent of its revenue drawn from domestic business.

If Nippon was not in the top 10, Swiss-based Panalpina would take its place. The top global top 3PLs are US- or EU based except for 10th place Kuwait-based Agility.

Of developing country 3PL mega growth, Mr Escott, who owns a consulting firm, Hudson Logistics in Wisconsin, said: "They will only emerge if companies that are native to China, India and Brazil are large enough global players to then drive the growth of a native 3PL to that scale."

Mr Escott said he doubted there would be much movement away from established players. "Western multinationals will by far prefer western multinational 3PLs and I don't see them placing [much] business with a Chinese or Brazilian 3PL because if you need help in China you've got choices of people who truly understand western approaches to quality, lean, customer service and totally above board business dealings."
(Source:www.schednet.com)