North and South American Logistics 2010

Charting market size, growth and outsourcing trends across 5 key logistics markets to 2012

In its latest published research, North and South American Logistics, Analytiqa forecasts impressive growth for outsourced logistics expenditure across five key countries.

> Spending on logistics set to increase by US$106 billion through 2012...

> Significant development and expansion of South American logistics markets...

> US sees first time outsourcing growth, but also dissatisfied customers taking operations back in-house, or insourcing, from 3PLs...



480+ pages provide a detailed, comprehensive analysis of the 'health' of the North and South American logistics industry and forecasts its future development.




Analytiqa - Wednesday, 07 July 2010:

Analytiqa's latest research, "North and South American Logistics 2010" reveals that spending on logistics across Argentina, Brazil, Canada, Mexico and the United States is set to increase by US$106 billion through 2012, as the size of outsourced share of this expenditure grows by 32%.

Whilst the United States dominates the region's logistics activity, it is consistently outperformed, in terms of growth at least, by the smaller, developing markets of Argentina, Brazil and, to a lesser extent, Mexico.

In addition to sizing logistics markets and evaluating outsourcing rates in each country through 2007 - 2012, Analytiqa's research identifies leading 3PLs in each country, together with the obstacles 3PLs face in growing their markets profitably and, with the help of the logistics professionals it interviewed across the Continent, also highlights the most important industry sectors that 3PLs should be targeting for new business.

Following a decrease in market size of some US$20.0 billion over the 2007 - 2009 period, Analytiqa's research warns third party logistics providers (3PLs) that in each country, there are unique challenges that they will have to overcome if they are to be successful.

Flexibility and technology drive market growth

Whilst targets for growth by industry sector will be unique to each national market, on a more generic level across country boundaries, for 3PLs looking to win business, flexibility is a 'must-have'. Whether they are on the streets of São Paulo or delivering across California, 3PLs must improve their responses to changes in volumes, locations and deadlines. However, with this flexibility also comes increasing demands for greater speed of response. As supply chains become leaner and inventories decline, outsourcing become an increasingly attractive proposition, but quite literally, the pressure on 3PLs 'to deliver', increases.

This is where the use and application of technology will also be increasingly important. To enable growth objectives to be achieved, investment by 3PLs takes on an ever important role and careful choices will have to be made about when, where and how to invest in future growth. On the one hand, investment in transport management remains vital, if efficiencies are to be maximised and costs minimised. However, 3PLs must also invest in greater customer relationship management, meeting manufacturer and retailer requirements for their service providers to engage with them in a more regular, intelligent fashion, something they fail to do at present.

On a country by country basis, key and emerging trends include:

Argentina

An increasing level of sophistication of logistics service provision is largely customer driven, as demands for greater visibility of products, reverse logistics solutions and / or value added services more often than not originate from retailers or manufacturers, with logistics service providers reacting to these needs.

Brazil

Brazilian supply chains continue to be hampered by costs that are significantly higher relative to other countries but growth potential arises from integrated supply chain requirement and greater levels of supply chain collaboration (such as shared user warehousing or even distribution). Transport infrastructure continues to suffer from poor management but the award of global sporting events in the country (World Cup 2014 and Olympics 2016) will finally provide the stimulus to improve conditions.

Canada

In order to survive, traditional trucking companies are expanding their expertise to encompass a wider spectrum of services. This is not only driven by increasing customer sophistication in their supply chain operations, but also by the competitive forces that exist between service providers and the consolidation of a fragmented service sector.

Mexico

The relatively high nature of logistics costs will eventually lead many manufacturers and retailers to outsource their supply chain activities as they seek opportunities for cost reduction. Whilst automotive and consumer - retail markets lead the way, there is room for significant improvement in service provision across other industry sectors.

United States

As the region's most developed and mature logistics market, the challenges faced by 3PLs in the US are somewhat different to those in South America. Among those analysed in Analytiqa's report, there are fears that at a basic level, the logistics sector will experience a severe skills shortage as the industry struggles to attract the level and quantity of talent to meet its growth objectives.

Looking ahead

Analytiqa forecasts that over the next five years, the 'less mature' logistics markets of South America will continue to embrace outsourcing of their logistics services.

Markets in South America are set for significant development, particularly of more integrated logistics solutions - combining warehousing and distribution for example - rather than the more basic levels of service provision that currently exist.



Mark O'Bornick, Research Director, Analytiqa commented:

"As the economies of Latin America shift from producer-led economies to consumer-led economies, supply chains will react, change shape and develop in line with the end-markets they ultimately serve. Driven by economic growth and greater awareness of the benefits of outsourcing, the contract logistics market will undoubtedly grow, but there is clear evidence that 3PLs are not maximising their opportunities.

3PLs cannot take growth for granted, especially where they are perceived to add little value. In fragmented service provider markets, the increasing consolidation of 3PLs, through M&A activity, will enhance scale and provide opportunities for advancement, but the downturn has sharpened the price sensitivity of customer negotiations. This will remain for some time and the chance that sophisticated customers will in-source away from 'commodity service-based' 3PLs remains a real threat."

Notes for Editors:

For additional illustrations, Analytiqa logos, charts and data tables to support your requirements, please contact Analytiqa. To discuss the issues raised in this article, or any of the products and services offered by Analytiqa please call us on +44 (0) 1707 37 22 11 or send an email.

Analytiqa has researched the market size for logistics and contract logistics (the outsourced share of the logistics market) in North and South America, using the same consistent methodology it uses elsewhere around the world. In terms of logistics, Analytiqa refers to this as the provision of the traditional 'domestic' activities of distribution and warehousing and supply chain services (picking, packing etc….).

Excluded from this definition by Analytiqa are road freight, LTL and FTL services, together with air and sea freight. Therefore, the definition of outsourced logistics or contract logistics as used in this report, is the process of outsourcing the management and / or operation of a customer's warehousing and / or flow of goods or components. Contract logistics includes ground-based supply chain management services, transportation, just-in-time services, sub-assembly and other value-added activities.

The term '3PL' as defined by this report is third party logistics companies that account for the outsourced element of the logistics market as defined above. Whilst it is common, particularly in the US, for any logistics company to be described as a '3PL', by the definitions outlined above, road transport companies and freight forwarders are excluded from the term '3PL' in this report.

Throughout this report, the term 'North and South America' is used as an aggregate term of the sum of the five countries analysed by Analytiqa. Thus, for the purposes of this report only, North and South America is defined as: Argentina, Brazil, Canada, Mexico and the United States.

About Analytiqa:

Analytiqa is a leading business information company providing published reports and databases, custom research and consulting for multi-national clients across a number of industry sectors from Logistics and Distribution through to FMCG and Professional Services.

As a business information provider, Analytiqa is positioned between the logistics providers and their customers to provide the supply chain sector with commercially relevant business intelligence. Analytiqa works closely with logistics providers to source new customers and to better help them understand their existing clients.

Similarly, retailers and manufacturers use Analytiqa's supply chain profiles, databases and research services to analyse the operational and service capabilities of service providers and to benchmark the services they receive against those of their own competitors.

Analytiqa works closely with its clients, building partner relationships based on trust and the delivery of high quality and commercially relevant research. Analytiqa's services correspond to client's demanding requirements, assisting with their business development and profitability objectives.

To better understand how to maximise your return on business information visit: www.analytiqa-interactive.com

North and South American Logistics 2010

Latest Research: Market size, market growth rates, market shares and outsourcing rates. Analysis of past market performance along with forecast growth and outsourcing trends for contract logistics markets across five major American markets.

> Detailed understanding of market drivers by industry sector
> Benchmarking of historic growth rates
> Evaluating outsourcing rates in contract logistics

This report provides an analysis of past market performance along with forecast growth trends for logistics markets across North & South America, focusing specifically on the following five countries: USA; Canada; Brazil; Argentina and Mexico.

> Country-specific analysis
> Identification of future growth opportunities
> Forecasts of growth and outsourcing to 2012

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Unique Research: Analytiqa's UK Multimodal logistics report focusses on the key issues of interest to both shippers and logistics providers. It investigates growth areas of multimodal logistics services, along with the service satisfaction levels recognised by shippers and future service improvements they would like to see, as well as key areas of concern, including.

> Key objectives for manufacturers and retailers
> Understanding multimodal supply chain benefits
> Prospects of collaboration
> Perception of risk

Based upon an exclusive primary research survey with UK manufacturers, retailers and logistics providers, the report provides unique, 360-degree insight into the key issues and challenges that multimodal logistics faces - but also the benefits that it can bring to the supply chain.

> Satisfaction with current service providers
> Addressing future challenges
> Forecast take-up of multimodal services

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Analytiqa's Global Logistics Contracts Database provides detailed information on thousands of contract awards collected from across the logistics industry. Analytiqa's experienced analysts undertake regular research of contract wins and losses, extensions and renewals.

Regular, monthly updates of the Global Logistics Contracts Database bring you an essential customer intelligence tool that will ensure your business development teams are kept abreast of the competition.

> Analyse Contract Lengths and Values

> Track 35 industry sectors in over 45 countries

> Search, Filter and Track Key Variables

> Identify Renewal Dates, by Customer and Service Provider

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