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Mar.09, 2015

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3PL SERVICE FRUSTRATION ON THE RISE, STUDY SAYS T H E R E I S A g rowing disconnect bet ween third-part y log istics providers and manu- fact urers a nd reta ilers who say t hey a re dissatisfied with 3PLs' level of service. Accord- ing to a recent survey of more than 400 logistics and supply chain executives, 55 percent of the manufacturers and retailers polled say they already have switched, or intend to switch, 3PLs. "3PLs appear to be on their back foot," the eyefortransport report says. Between 2012 and 2014, the survey found a 4 percent jump in "less than satisfied" responses from manu- fact urers a nd reta ilers. Posit ive rev iews declined 3.5 percent over the course of the past two years. And service, the study reports, was the primary driver. Business is booming for 3PLs, but as cost-cutting becomes the pri- ority for manufacturers and retailers, more and more businesses have beg un to "shop around" for more services at a lower price — driving down satisfaction, renewal rates and contract length. Industry insiders have sug- gested for years that the logistics sector stands on the brink of commoditization: providing only short-term contracts for execution-based services at the lowest price, rather than long- term relationships with value-added, strategic operations. TRANS-ATLANTIC CARRIERS' RATE PUSH FACES HEADWINDS TRANS-ATLANTIC CARRIERS FACE a struggle to increase rates amid rising capacity and new competition, even as the euro's slide against the U.S. dollar boosts shipments on the key west- bound leg, according to Drewry Shipping Consultants. Traffic from Europe to North America increased 8.4 percent in 2014, the second-fastest-growing key east-west route after the Asia-Medi- terranean trade, which grew 12.6 percent, according to preliminary estimates by the London-based firm. Ships were full to over-spilling on the westbound leg in the fourth quarter, with demand exceeding supply in October and December. "But the introduction of the new alliances and first timers ... has the potential to disrupt the market," Drewry cautioned. Traffic barely dipped in the final three months of 2014 from the third-quarter peak season to post year-over-year growth of 12.6 percent, as a depreciating euro trimmed the price of European products. The North Europe- U.S. trade grew the fastest, with traffic rising 9.2 percent to 1.9 million TEUs, while shipments to Canada were up 6.9 percent at 600,000 TEUs, outpacing a 6.4 percent increase in Mexican shipments to 300,000 TEUs. The weaker euro widened the traditional imbalance in the trade with traffic to North Europe sagging 7.1 percent in the final quarter to reduce full-year growth to "virtually zero" at 2.1 million TEUs. Spotlight 6 THE JOURNAL OF COMMERCE MARCH 9.2015 6 THE JOURNAL OF COMMERCE "The introduction of the new alliances and first timers ... has the potential to disrupt the market."

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