The enormous growth in Asian imports coming through the ports of L.A. and Long Beach hasn't just meant more business for warehousers and longshoremen; logistics providers are seeing a record year.
Logistics providers consolidate all aspects of international shipments for the big importers. They have become an increasingly crucial part of the import chain, because U.S. retailers and manufacturers have become more and more dependent on overseas suppliers for their merchandise and assembly operations. These companies need experts to manage their supply lines and to make sure that their goods actually arrive on time and in good condition.
"We're in an era of specialization," said Bob Curry, president of California Cartage Co. in Long Beach. "People that sell shirts want to stay out of distributing them and farm that out to somebody who is better at it than they are."
Curry whose family-owned company is one of the biggest logistics providers in the L.A. area, with 1.5 million square feet of warehouse space said he has seen demand from department stores and other retailers grow rapidly in the last few years and that the company has been busy expanding its facilities and adding personnel. According to Curry, value-added services, like putting labels and bar codes on merchandise, have been in particularly high demand.
According to the 1997 Economic Census, the most recent count available, transportation and warehousing was a $319 billion business nationwide. Los Angeles County alone had 4,722 establishments with a combined $15 billion in sales revenues in 1997, and that figure is expected to be considerably higher this year. The industry is expected to grow by an annual rate of between 12 and 16 percent.
The segment at the forefront of this rapid growth is the third-party logistics providers or consolidators, who offer a host of services ranging from trucking, warehousing, quality control and packaging, to putting the price tags on merchandise for their clients.
With the volume of imports from Asia through the ports of Los Angeles and Long Beach breaking one record after another, it would take an enormous investment of capital for retailers to control, warehouse, label and distribute the ever-increasing flow of goods themselves.
And it's not just the boom in international trade that is driving the businesses of logistics providers. Many retailers have come to rely on just-in-time inventory management, which minimizes the cost of storing merchandise in warehouses for long periods. So, when it is a matter of getting the summer collection in stores just in time for the ad campaign, retailers have come to rely on professionals who can guarantee that it's going to be there on time.
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