After a dry spell, more than a few third-party providers appear ready to break out the bubbly to celebrate a business turnaround. Just over one-third of the respondents to a survey conducted in March by IWLA and The Association for Logistics Outsourcing are predicting double-digit revenue gains this year. "We've seen a very dramatic turnaround on the number of jobs we are bidding," says Bruce Abels, president and COO of Saddle Creek Corp., a third-party provider based in Lakeland, Fla., who participated in the survey. "We've gone from famine to feast." Dave Mabon, senior vice president of sales and marketing for Kuehne & Nagel, a global provider of third-party services, adds that his firm is seeing growth in all of the sectors it serves: automotive, high tech, retail, and pharmaceutical and healthcare.
Not all survey respondents were quite so bullish in their forecasts. Thirty-five percent of the members polled for IWLA's 2004 Business Outlook said they only expected revenues to nudge up between 5 and 10 percent. Still others are not yet convinced that business has turned around: 14 percent of the respondents expect sales to decrease or remain the same (though that's a substantial improvement from the 32 percent who made similar projections a year ago).
Still, many respondents apparently feel confident enough to proceed with plans to hire more workers. About 50 percent of the third-party providers reported that they planned to add staff this year. Forty-four percent plan to make greater use of temporary workers.
Of course, not all of the news is rosy. More than half of the respondents (54 percent) expect sharp increases in health insurance costs, and 27 percent are steeling themselves for soaring property and casualty insurance bills. Fifty-seven percent expect to be hit with higher security costs in the coming months, thanks to increasing demands to secure the supply chain from terrorist threats.
IWLA announced the survey results at its annual meeting in Phoenix last month.
Source: International Warehouse Logistics Association