Three seemingly unconnected trends are converging to affect the way business is conducted in the trans-Pacific: the development and expansion of the U.S. inland port infrastructure; the push of factories toward China’s inland cities; and the adoption of technology to drive supply chain visibility across modes through the use of the Internet and cloud-based software. How 3PLs respond to these trends may determine their success in an already overcrowded and mature market.
The expected expansion of the Panama Canal in 2014 has touched off a flood of activity by East Coast ports to develop inland ports hoping to capitalize on the opening of the canal to increase their market share. Many companies that control the imports want to diversify their risk and move to a model supporting both West Coast and East Coast ports. This trend will realign the distribution expectation and footprint of companies sourcing from Asia serving the U.S. market.
Although many China analysts have predicted the decline of China manufacturing, the truth is the source of manufactured goods from China is shifting inland. Much of this volume from inland cities will come from ports located along the Yangtze River. China’s increased manufacturing costs have companies rethinking their sourcing and manufacturing strategies. Several countries provide potential alternate sources of labor as China’s coastal factories become too expensive. This shift will increase the complexity of managing the inbound supply chain for U.S. companies.
This, in turn, will favor transportation and logistics companies that can provide transparent and consistent services in a landscape that will continue to change. Service providers who fit this model will be those companies who are efficient at managing information. Service providers who have truly embraced Internet technologies and can deliver data on time, every time, will have a distinct advantage. After all, anyone can move a container.