Earlier this month, Research and Markets added to their “Third Party Logistics (3PL) Market Analysis By Service, By Transport (Roadways, Railways, Waterways, Airways), By End-Use (Manufacturing, Retail, Healthcare, Automotive), By Region, And Segment Forecasts, 2014 – 2025” report.

Experts are estimating the 3PL market to reach USD $1.24 trillion within the next decade. That’s a massive increase considering that the current market is estimated to sit at USD 721 billion according to Armstrong & Associates, Inc. There are eight reasons why this is the case. That’s why this month we thought we’d focus our infographic on the top market growth predictions for 2025 when it comes to the third-party logistics industry.

Third-Partly Logistics Market Growth Predition for 2025

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As business around the globe continue to expand their operations, the 3PL market will continue to parallel its growth. The Research and Markets updates highlight how this will affect revenue and coverage. Overall, it looks like the next few years will be a good time for the 3PL market.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Outsourcing is business strategy of contracting work out to a third-party. Companies use outsourcing to gain access to cheaper labour, larger specialized labour pools, and/or obtain other benefits through an economy of scale. The term encompasses both the setup of a subsidiary, and the off-site activities of a company.

For decades, companies used outsourcing strategies to meet the needs of their business, but it was not formally identified as business strategy until 1989.

The three main types of outsourcing are: offshoring, nearshoring, and reshoring in the logistics and supply chain industry. The main difference between them is the location of the third-party. Each has its own benefits and costs, but because of the dynamic nature of global political-economy these are always changing.

We created this eBook to kick off 2017 to clarify why companies choose a particular offshoring option over another. This way, you can see how manufacturers think about these strategies.

What is the Difference Between Logistics Oursourcing Options

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Choosing Shoring Options

There are many advantages to outsourcing certain jobs and functions—cost advantage, access to bigger pools of skilled labour, increased efficiency, and saving on infrastructure and technology. However, the biggest advantage is that it allows your business to focus on core areas. Your business will be able to spend more time on building its brand, R&D, and providing higher value added services.

Offshoring, nearshoring and reshoring each have their own distinct advantages and disadvantages. Though, what will work best for your business will depend on its goals and core competencies. Talking to a third-party logistics provider is a very useful way to learn more about sourcing options.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

On February 4, 2014, we released a white paper detailing the different ways the logistics landscape had changed. Developments in the industry had created new challenges and opportunities all along the supply chain, shifting the world of transportation.

The last few years has seen many developments in the realm of logistics. The recent carrier, port, and labour issues; rate instability, primarily in ocean carrier; and rising costs in other areas of the world, specifically China, has led a number of global companies to reconsider their outsourcing strategies.

This week on the blog, we are taking a look at these changes in the logistics landscape and what progress has been made since 2014.

White Paper: Third-Party Logistics and Mexico Nearshoring Still Growing

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

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The 3PL industry has come a long way in a few short years with its evolution from tactical service providers to collaborative partners that take on greater accountability and control.This week on the blog, we wanted to focus on the relationship between shippers and 3PLs.

In the past, the question was why a company should hire a 3PL as many companies had their own in-house logistics teams; then the question became if a company should hire a 3PL as the cost-benefit of outsourcing certain functions was weighed. And now in 2016, the question is which 3PL a company should partner with as a growing number of companies have as best practice, the outsourcing of some or most of their logistics functions.

The 2017 21st Annual Third-Party Logistics Study, which was released recently by Capgemini Consulting, Penn State University, and Penske Logistics at the Council of Supply Chain Management Professionals Annual Conference in Orlando, Florida sheds light on the change in strategy.

Data for the study was based on feedback from 194 usable responses from both shippers, or users of 3PL services, and non-users of 3PL services, as well as a separate, related version of the survey by 148 respondents from the 3PL sector.

One of the focuses of the study was looking at the 3PL and shipper partnerships in tandem with the strategic nature of relationships.

Of those surveyed, 91% of shippers and 97% of 3PLs indicating they have successful relationships that are bringing about positive results, which is up from 2012, which showed that 88% of shippers and 94% of 3PLs cited successful relationships.

75% of shippers and 93% of 3PLs also indicated that using 3PL services has led to over all logistics cost reductions, and 86% of shippers and 98 percent of 3PLs said that has led to improved customer service.

Big data, the new core competencies of 3PLs

A selling point for 3PL partnerships is the effectiveness such a relationship provides in preventing visibility “black holes”.

By selecting the right 3PL provider, a company gains in-transit visibility for all inventories from point of origin to final destination, information concerning production status, and projected inventory at destination distribution centered as well as accurate ETAs and data that would allow for easy comparison of expected performance to actual performance.

Big data, the study indicates, is the new way visibility is ensured and the new core competency 3PLs are providing.

Key Area for 3PLs

The biggest focus areas related to big data cited in the study for shippers included: improving integration across the supply chain; improving data quality; improving process quality and performance; increasing levels of data transparency; improving customer interaction and service; and improving logistics optimization.

98% of 3PL’s indicating that improved, data-driven decision-making is essential to the future success of supply chain activities and processes, which was supported by 93%of shippers.

86% of 3PLs and 81 percent of shippers also noted that effective use of big data will become a core competency of supply chain operations.  

The study ultimately explains why so many businesses have turned to 3PLs for their logistics needs. Strategic shipper and 3PL relationships create value throughout the supply chain.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

morai-logistics-blog-omni-channel-fulfillment

With so much discussion over omni-channel fulfillment being the future, it is interesting then that only 19% of the top 250 retailers are currently fulfilling omni-channel demand profitably, according to a new the third annual Sands Future of Retail Report.

Despite such a small percentage of top retailers making a profit from omni-channel fulfillment, the service is in high demand by customers and growing.

For example, for nine out of ten consumers, free shipping was reported as the top incentive to shop more online. This number has grown to become the top consideration. One-day shipping (69%) and free returns (68%) also continue to be top drivers.

The Future of Retail and Logistics

There were other key findings of note in the study:

  • Nearly a third of consumers (31%) now shop online at least once a week, an increase of 41% from two years ago.
  • Only 9% of consumers have used same-day shipping in the past year, but almost half (49%) say same-day shipping would make them shop more online if it were offered more frequently.
  • 40% of consumers expect to receive their first drone-delivered package in the next two years or less. Less than a third (31%) think it will take more than five years.
  • Among consumers who don’t trust drones to deliver packages, theft and damaged packages are the top concerns (72% each), but safety (68%) and privacy (60%) seem less risky than they were a year ago.

A theme throughout the study from customers was the expectation of greater and greater speed of the supply chain. This can be seen by the finding that consumers who shop online more than twice a week are twice as likely to be persuaded by same-day shipping as consumers who shop online only a few times a year (63% vs. 32%).

The main reason that so few top retailers are yet to make a profit from omni-channel fulfillment is simply that they have yet to figure out how.

According to the 2015 Third-Party Logistics Study, fully one-third of all respondents (nearly 800 manufacturers, retailers and 3PLs) say they’re not currently prepared to handle omni-channel fulfillment.

Tim Foster, managing director, Asia-Pacific, with supply chain consulting firm Chainalytics weighed in on the discussion.

“Forester believes manufacturers and retailers will address this market transformation by eliminating non-value-adding activities within the supply chain. He cites the example of pharmaceutical distribution, where the traditional supply chain flow from manufacturer to wholesaler to retail pharmacy is being replaced by either a direct flow from manufacturer to retailer, or a loop with the 3PL in the center” summarizes Material Handling and Logistics News in this article.

3PLs have some time to catch up to customer demand. Privacy and security concerns are hampering the demand for omni-channel distribution in the areas of mobile phone payment. “This could explain why adoption has essentially remained flat year over year, with about a third of consumers having used these applications. Still, U.S. mobile payment transactions are expected triple in 2016 to $27 billion, a sign that a few eager early adopters and the growth of Apple Pay could eventually force more widespread changes in consumer behavior” concludes the article.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

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Nominated during OWIT (Organization of Women in International Trade) Toronto’s Annual Awards Ceremony, where Kelli Saunders of Morai Logistics Inc. wins Woman Exporter of the Year.

Toronto, ON (June 16,2016)

On Thursday, June 9th 2016, Kelli Saunders, President of Morai Logistics Inc., an Authorized Agent of Mode Transportation, was the recipient of The Woman Exporter of the Year Award from OWIT-Toronto (Organization of Women in International Trade-Toronto). Nominees had to have at least 50% ownership of a profitable business registered and operating in Ontario for more than 3 years. Nominees also had to have earned their primary income from the business and must have been responsible for its daily operations. A significant portion of her company’s business had to have come from exporting products or services.

The Woman Exporter of the Year Award honors an outstanding woman entrepreneur who, through her exporting endeavors, is advancing women and the image of Canadian business women in the international community.

Network and Cherish Those Around You.

Kelli was presented this award for her company’s work with major fast-moving consumer goods companies as a third-party logistics provider with expertise in cross-border intermodal logistics in the US and Mexico.

Jim Damman, President of Mode Transportation, said:

We are all very excited for Kelli. She is an outstanding businesswoman, and she and her team do a great job of providing the best export solutions to her valued customers. This award is very well deserved. Her hard work in receiving this award is something that makes all of us very proud.

Kelli’s advice to other women is to network and cherish those around them. Surrounding yourself with energetic high achievers will give you the foundation for a strong, career-long network from which to grow.

Shown above is Kelli’s acceptance speech.

ABOUT OWIT TORONTO: OWIT-Toronto (Organization of Women in International Trade) is a non-profit professional organization designed to promote women doing business internationally, by providing networking opportunities, export education and global business contacts. Members include women entrepreneurs, service providers and business women involved in international trade.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

The Industrial Internet of Things (IIoT) leverages the interconnectivity of machines and systems with sensors, intelligent data, and analytics to provide increased visibility and better insights into the performance of equipment and assets. Despite what its potential offers, attitudes surrounding IIoT are mixed. Some industry leaders are optimistic, others are dismissive.

For this week’s infographic, we’ve decided to cover nine facts and figures about the opinions of industry leaders related to this topic.

9 Facts About the Industrial Internet of Things (IoT)

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Cargo theft isn’t anything new. From the days of bandits attacking caravans to pirates on the sea, if there is money to be made from stealing cargo and fencing it then attempts will be made to steal it. The real change is in the sophistication and planning that thieves utilize in their planning.

Globalization has also made the scope of the problem much larger. The ripples felt in one part of the world from stolen cargo can affect consumers and businesses on another side of the world. That’s to say nothing of the highly organized, highly structured, gangs, cartels, and black markets which fence the items taken from stolen cargo whose networks can stretch time zones.

This month, we’d like to focus our ebook on looking at the current state of cargo thefts and ways we can minimize these occurrences.

Looking at the Impact of Cargo Theft and Possible Solutions

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That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Blog-US-Manufacturing

Earlier this month, Deloitte Touche Tohmatsu Limited (Deloitte Global) and the Council on Competitiveness (Council) release the 2016 Global Manufacturing Competitiveness Index report. The most interesting highlight from the report is that by 2020, the U.S is expected to the most competitive manufacturing nation with China moving to the number two spot.

The study used an in-depth analysis of survey responses from over 500 chief executive officers and senior leaders at manufacturing companies around the world. Respondents were asked to rank nations in terms of current and future manufacturing competitiveness.

Other major highlights of the 2016 Global Manufacturing Competitiveness Index (GMCI) include:

  • The U.S is highly competitive in terms of the share of high skill and technology contribution to exports and labor productivity as measured to gross domestic product (GDP) due to continued heavy investment in talent and technology.
  • Among the BRIC nations, manufacturing executives expressed optimism for only China and India by 2020. The other three – Brazil, Russia and India – have seen continuous declines in the study’s rankings over the past six years, despite aspirations that they may emerge as manufacturing goliaths.
  • Brazil’s political uncertainty, Russia’s geopolitical activities and impact from the slide in global crude oil prices, matched with India’s challenged economic and policy actions around infrastructure and investments, have likely triggered the decline from the BRIC’s manufacturing competitiveness peak.
  • The U.S. stands out as the anchor for the North American region with the highest level of manufacturing investments, a strong energy profile, and high-quality talent, infrastructure and innovation. Canada’s low trade barriers, tariff-free zone and investments in sectors key to its growing high-tech manufacturing future, along with Mexico’s 40 free trade agreements, low labor costs and close proximity to the U.S. round out the region.

China moving to the number two spot for manufacturing isn’t surprising given the meteoric rise of worker wages which has increased at a 13.7 percent annual rate, or close to six times the overall inflation rate according to the U.S Department of Commerce:

While China’s rapid wage growth is not the norm in many other countries, manufacturing wage growth in a number of countries has easily outpaced wage growth in the United States—and may well surprise manufacturers who are not expecting such growth. Between 2000 and 2013, annualized manufacturing wage gains were, for example, 6.5 percent in Brazil, 5.4 percent in the Philippines, 6.7 percent in South Korea, and 7.9 percent in Poland

“Made in the USA is making a big comeback,” says Deborah L. Wince-Smith, president and CEO of the Council on Competitiveness. “Contrary to the view that manufacturing is dirty, dumb, dangerous and disappearing, our study points to a manufacturing future characterized by innovation-driven growth…The manufacturing rebound in America is all about advanced manufacturing, not bringing low-wage, low-level manufacturing back. That will make us competitive at the high-end of advanced manufacturing where jobs are fewer and require a high level of skill.”

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Blog-Labour-Dispute

For this week’s blog post we would like to look at a case study of what happens when supply chain security is weak for a product that is in high demand.

“In addition to the actual threats, many factors make global supply chains complex and challenging to secure. The speed at which today’s supply chains operate, for example, can be difficult to reconcile with security measures” writes Amy Roach Partridge in this 2012 InboundLogistics.com article on supply chain security. “And, because supply chains today are often so long and fragmented, it can also be difficult to ensure security is treated with the same urgency by every party in the process” she writes.

This is an important lesson as just earlier this week, several news outlets reported on the California nut shipment thefts that have so far totaled losses of $4.6 million as of just last year. 31 cases have been reported within a span of one year with the thefts costing from $150,000 to $500,000 per shipment.

Losses for all four years combined reached nearly $7.6 million.

The thieves have been getting high-tech with how they’re stealing shipments as most of shipments were stolen through fraud rather than break in. Websites where truckers search for cargo assignments have been getting hacked as their cybersecurity measures have been lagging behind other industries according to this LA Time article. “A common ruse is to use a false company to hire a legitimate trucker, then tell the trucker to divert the load to another warehouse, where he is paid and sent on his way” writes the article. “Scammers also have used “ghost trucks” that duplicate legitimate ones but are untraceable on trucking databases. Thieves have also tested security measures by sending scout trucks that abruptly leave processing plants without picking up loads” it continues.

It may seem strange that these thieves are putting so much effort and time into stealing nuts, but it is important to remember that demand for the health-food snack has soared in emerging economies such as China. California is also an especially lucrative state to target for these heists as it produces more almonds, walnuts and pistachios than any other state, with a combined value of $9.3 billion in 2014. Almonds alone were valued at $5.9 billion, according to the U.S. Department of Agriculture.

So why nuts? This article on Quartz.com describes the reasoning, “Food and beverages have replaced electronics as the most-stolen good in the US. Criminals are concentrating their efforts on fewer heists of larger value, and as stolen goods go, nuts have a lot of appeal. They’re expensive. They have a long shelf life. They have no serial numbers and can’t be electronically tagged or traced.” Cargo theft of consumables isn’t all that uncommon the U.S in fact. Just last year about 28% of the 881 incidents of cargo theft involved food and beverages, more than double the number targeting electronics. Of that number, California accounted for 158 of the U.S’s cargo thefts, with losses of about $18.7 million.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.