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'Significant potential' for third-part logistics

15th March 2007, Page 16
15th March 2007
Page 16
Page 16, 15th March 2007 — 'Significant potential' for third-part logistics
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THE NEXT FIVE years are expected to be a boom period for third-party logistics providers (3PLs), as the outsourced logistics market in Western Europe grows by 33%.

However, analysts at business information provider Analytiqa warn that opportunities for 3PLs must be earned as they will no longer be able to rely on greater outsourcing penetration and sustained margins.

The latest research from Analytiqa suggests that spending on logistics services in the automotive, consumer, pharmaceutical, retail and technology industries will increase by €30bn (E20,4bn) by 2011. It says manufacturers and retailers will turn to 3PLs to manage the international flow of goods to cope with the demands of just-in-time processes.

Analytiqa predicts that in five years' time logistics providers will handle more than 57% of the sector's supply-chain requirements.

Outsourcing rates across Southern Europe are also expected to grow, while in the mature Northern European markets growth will come from the trend towards online shopping and environmental legislation requiring the recycling of electrical products.

Mark O'Bornick, research director at Analytiqa, says: "There remains... significant potential for 3PLs to capture market share and achieve growth as supply chains extend across Europe and green logistics begins to play an increasingly visible role in the supply chain.'

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