By Clifford F. Lynch
Traffic World, January 20, 2003
As the concept of logistics outsourcing has become more popular, the third-party industry has grown at a rapid pace and, to some extent, more by accident than design. Today there are literally hundreds of companies offering 3PL services and as one might imagine some of these offerings are executed more efficiently than others.
Which are the best? Best is a relative term and each user of 3PL services will have unique needs that will lead them to specific providers. Notwithstanding this, there are ten which, in my opinion, stand out as “leaders of the pack.”
Schneider Logistics has some of the most sophisticated supply chain technology in the industry. It offers solutions, implementation and management, and given its Schneider National roots, has a broad underlying understanding of the industry that many of their technology competitors simply do not have. They are extremely well managed, well staffed, and quick to respond to client needs.
C. H. Robinson Worldwide has grown from a produce company to a major publicly-held provider of transportation-based and other logistics services in the United States and abroad. Experience and customer relationships make it a strong competitor, as they have adapted easily to changes in the logistics environment.
Exel has grown through acquisition and merger to a major worldwide force in warehousing and other related services. With 45 million square feet of warehouse space, it has more than Target Stores, JCPenney, Daimler Chrysler, and Circuit City combined. This breadth of coverage makes it popular with clients seeking single-source warehousing solutions.
USCO, for some time a successful, well-managed warehouse service provider in North America, now is a part of the Kuehne & Nagel global network and can offer worldwide solutions for its clients. Conversely, USCO was an excellent vehicle for Kuehne & Nagel to expand in the U.S. market. The company has been particularly strong in pharmaceuticals.
United Parcel Service has taken their “brown truck” success several steps further through UPS Supply Chain Solutions. It is a true global provider and a force to be reckoned with not only in moving small packages but also in warehousing, other forms of transportation and technology. It is very service focused.
Menlo Worldwide, formed in 2001 by the consolidation of Menlo Logistics, Emery Worldwide, and Vector SCM, has become more aggressive in the marketplace. While the logistics group continues to keep a lower profile than many of its competitors, it has been moving quietly into a number of new cities with contract warehousing operations and transportation. Expanding globally, it just opened a $12 million regional hub in Singapore.
DSC Logistics has grown from the roots of what was once called Dry Storage Corporation. Despite this rather unimaginative name, it was one of the early premier warehouse companies in the Midwest, and DCS has grown from this to an efficient, sophisticated national provider of warehouse and other supply chain services.
GENCO has been in operation for over a century, but in recent years has positioned itself as one of the pioneers in, and leading providers of, reverse logistics services. Through thoughtful acquisition, sophisticated systems and operations, it has solved the returned goods problem for many clients. Although better known for reverse logistics, it also has excellent forward logistics operations and systems.
Cat Logistics, a subsidiary of Caterpillar Inc., has converted its parent company’s expertise in moving products around the world to an impressive logistics service offering. It has both global reach and good technology and is particularly strong in parts distribution.
My tenth choice consists of a combination of seven small- to midsized companies. While not as large as some other providers, they and others like them have planted the seeds of outsourcing growth. Coincidentally, all are warehouse-based, although they offer other services, as well. All are well managed, have multiple locations, and in total have hundreds of years of experience. Combined into a fantasy national network, a conglomerate of Acme Distribution, Kane Is Able, Kenco, Saddle Creek, ServiceCraft, Standard Corporation, and Worley Warehousing sets a high standard for the competition throughout most parts of the country.
Obviously, these are not the only good logistics service providers in the industry. There are hundreds more that perform valuable functions for their clients throughout the world. Leadership is sometimes hard to define; you just know it when you see it, but in the logistics industry the leaders all seem to have three underlying and, in my opinion, necessary attributes.
First of all, they are well managed. No provider will succeed, no matter what services they offer, if it does not have good leaders and continuity of leadership.
Secondly, the leading providers have a broad, experience-based knowledge of the logistics industry that many of the new entrants simply do not have.
Finally, they have demonstrated that, whatever their roots, they have a proven ability to remain flexible and respond to change.
F. Lynch is
principal of C. F. Lynch & Associates, a provider of logistics management
advisory services, and author of Logistics Outsourcing – A Management Guide.
He can be found at www.cflynch.com.
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