Inside World Trade

Marriages of Convenience

November 6, 2012
Is supply chain management ahead of a trend or following at a distance? When the entertainment news and general media start picking up on a trend where older couples with decades together are splitting, supply chain executives are moving towards fewer, deeper relationships with suppliers.

The “green card” marriages to get into a market and the “marriages of convenience” that provided some short-term mutual benefit are becoming a thing of the past in leading supply chains. There may have been some splits among long-time partners already — the gray divorces — but supply chains appear to be headed down the road to commitment.

Well established studies of 3PL trends are beginning to reflect a move to fewer partners and stronger relationships. Retiring CEVA Logistics CEO John Pattullo even commented about a customer who acknowledges he has treated his manufacturing outsourcing this way, but not his logistics partners. The implication is, that was about to change.

Among the gray divorces, we see the announcement that the National Industrial Transportation League and Intermodal Association of North America will return to single life and conduct their annual shows/conferences separately. I recall when Ed Emmett, at the helm of NITL, asked at the first joint event of NITL, IANA and the Transportation Intermediaries Association, “What do we call this, what is the future of this relationship?” There was low mumbling from those present, but no single, visionary statement emerged.

With shippers, intermediaries, and carriers for most of the modes gathered in one place at one time, I expected it would become a magnet for the remaining elements of supply chain management: 3PL services (IWLA), air and ocean intermediaries (TIACA, Airforwarders Association, FIATA) and a variety of technology solutions and anyone else who had a common interest in logistics and supply chain management.

Ed Emmett may have asked that question before the supply chain management profession was ready to answer. The idea of a single showcase for the goods, services and technology necessary to support a high-performing supply chain and a venue where all of the constituents of those supply chains could discuss and resolve industry and regulatory issues as a $1 trillion industry may have been early.

Instead of the $68 billion railroad segment, the $35 billion transportation intermediaries segment, and the $32 billion air cargo segment vying for attention on infrastructure, regulatory, and trade matters in the shadow of the $629 billion trucking industry, we may have been on the path of being the unified $1.28 trillion supply chain logistics industry representing the 8.5 percent of the U.S. GDP that delivers the other 91.5 percent of GDP efficiently and cost-effectively.

With a little more vision and some major diplomacy and negotiation, we could have had all of the mode-specific events for asset and non-asset players at one venue at one time. The synergies for creating alliances would be tremendous.

The moment isn’t lost. We can still rise to the need. In fact, we must. And, supply chain leaders will drive collaboration because it is one of the most powerful tools they have.

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