IWLA conference spotlights 3PL industry

by By Michael Power

TORONTO: If you don’t deliver, you’re in for a rough ride. That message was delivered by Al Leger, partner and practice leader with consulting firm Supply Chain Alliance Partners, delivered during the International Warehouse Logistics Association’s (IWLA) fall conference in Toronto on November 3.

The one-day event focused on mature third-party logistics industry, with topics including understanding shipper needs, developing new metrics for 3PL stakeholders, warehouse standard developments and cost-saving solutions for warehouses.
Clients are getting leaner and 3PLs must follow suit, Leger told the full conference room. The emphasis from clients had shifted from assets to solutions.

Leger stressed there was an “intolerance for learning curves” among shippers looking to work with 3PLs. Rather, those clients want predictable outcomes instead of just getting the lowest costs, he said. Given that climate, forming partnerships with those clients also becomes difficult, Leger noted. While a true partnership meant co-operating to advance mutual interests, in reality risk intolerance tended to create an imbalanced approach to many outsourcing situations.

Mike Croza, a partner at Supply Chain Alliance, stressed the need for Canadian-based 3PL metrics. Usually, he refers to US statistics when speaking about the industry. “The US stats are pretty good but I think we can prepare our own,” he said. Canada’s geography and demographics were different than the US, he noted, and such metrics would give a picture of where the 3PL industry was in terms of maturity.

Croza stressed the need to collect such data in a secure fashion. He suggested relevant data areas could include: revenue within the 3PL market; the average size of deals and contracts; profit per 3PL service type; 3PL revenue per sector; and revenue per square foot.

On the economic front, assistant chief economist at the Royal Bank of Canada, Paul Ferley, told delegates there would be an economic recovery, but that recovery would come gradually. The US remained vulnerable, while Europe was still dealing with its sovereign debt situation, Ferley said. Greece remained the economic wild card, as the country had large debt held by French and German banks. Both countries would take a hit if Greece defaulted on its debt, Ferley noted.

Still, he stressed, the deterioration in the financial markets wasn’t as bad as the last recession. “At the moment, we’re not seeing those kinds of pressures,” he said of the global financial stage.

Also speaking during the conference was Bob Dineen, president of Dominion Warehousing and Distribution Services, who outlined a new chemical warehouse protocol. The IWLA and the Canadian Association of Chemical Distributors (CACD) have worked with their US counterpart—the National Association of Chemical Distributors (NACD)—to establish a North American Protocol within a body called the Council of Chemical Warehouse Providers. The protocol deals with the warehousing, handling and distribution of specialty chemicals and related products.

The CCWP will be the new IWLA council in terms of handling chemicals and will act as the industry’s voice, Dineen said. The protocol—called “responsible warehousing”—will be uniform across the supply chain, he noted.

Member companies looking to join must get verification and certification in terms of meeting the protocol, Dineen said. Organizations will have three years to complete a document certification and on-site audit. The process, he said, will be easy to understand but complex to pass. “There’s no perfection needed,” Dineen said. “It’s about continuous improvements.”

The process will help eliminate the multiple audits organizations now face if they belong to various groups, he said. “A one-time verification will save time and money across the industry,” he said. The standards have been developed and will be tested with two IWLA members soon. Those that join will see annual fees similar to other IWLA councils.