The contract logistics business "is healthy and growing," says John Pattullo, chief executive officer of CEVA Logistics. He sees particular growth in shipments to developing economies such as China and India, which are experiencing sharp increases in internal consumption. For China, he predicts a 9-percent rise in shipments over the coming year. On the freight-management side, he says, "things generally are a little softer."
Among CEVA's customer base, the old way of viewing logistics within functional silos, often involving a different provider for each piece, is breaking down. The move today is toward logistics providers that can integrate their customers' supply chains, managing hand-offs at multiple points and providing accurate information about where shipments and inventory are.
The international supply chain, in support of global trade, will continue to be a major engine of growth over the next five to 10 years, Pattullo says. With that trend comes a greater concern by companies over control and visibility of product. "If you're going across a 10,000-mile supply chain," he says, "it becomes infinitely more difficult [to manage]."
Companies will continue to cope with a series of "black holes" along the way. While logistics providers have made great strides toward minimizing those gaps, Pattullo doesn't believe they have reached the goal of consistently providing real-time tracking on a global basis. "It's an important challenge to industry, to get even better."
The occurrence of several natural disasters in recent years has caused companies to rethink their strategies of consolidating supplier bases. Many are asking whether "it is appropriate to have our supply chain entirely dependent on a developing economy that's thousands of miles from our market," Pattullo says. Instead of a "one-size-fits-all" strategy, companies are making more intelligent decisions about how and where to source product.
