Globalization drives logistics outsourcing
With globalization, companies set up operations in as many countries as
possible thus creating logistics requirements to integrate their local
subsidiaries.
This requirement has spawned a niche market in the outsourced services
industry, creating business for specialized logistics and supply chain
companies whose work is to untangle logistical nightmares and simplify
things for large conglomerates.
Traditional service providers like UPS and FedEx have long dominated this
market. But over time, the requirement has become complex and service
providers have learned to specialize in services like package delivery,
freight transport, moving, IT services, accounting, and consulting.
Interestingly, according to a report, those poised to make a killing in
this business are also conglomerates that have set up subsidiaries that
offer logistics services.
The likes of IBM, GE and EDS which have either created or acquired smaller
companies that already offer these services.
Currently, these subsidiaries contribute only a fraction of their parent
company's bottomline. But with globalization strengthening, logistics
could be a significant source of revenues in the future.
