What We Need (More Of) Now in Logistics

In logistics, somebody has to own the assets. 

That was the title of a post I wrote way back in April 2013. Here’s how it begins:

In most aspects of life, an asset is an asset, “a useful and desirable thing or quality,” as Dictionary.com defines it. But not in the logistics world, at least not to private equity investors and venture capitalists who view a 3PL with assets like an overweight runner, wearing a lead track suit and cement sneakers, in a field of sprinters.

Non-asset is non-fat, it’s sexy and desirable, it’s what every start-up 3PL tattoos on its forehead in case you missed it in its business plan, press release, and website.

But somebody has to own the trucks, warehouses, pallets, forklifts, IT, and other assets that make logistics — and the whole non-asset 3PL industry — possible.

I was reminded of this post when I saw this recent tweet by Kevin O’Meara, Vice President, Integrated Supply Chain at Shaw Industries:

In a follow-up tweet, Kevin adds:

“Everyone is focused on data and software, but that is no longer the problem. That void has been filled well by those [vendors cited in the tweet] above. It is the ‘hard assets’ that is the problem in supply chain and I don’t see anyone trying to solve that.”

Yes, data and software are important — but no amount of AI and machine learning can solve the physical constraints that exist in supply chains today. This includes the poor state of our transportation infrastructure. As one of our Indago supply chain executive members commented in a survey back in November 2020:

“I think the overall transportation infrastructure is a top priority, from lack of drivers to overall [transportation issues] within major cities. Also, [need to account for the] overall impact of more products moving across the existing network with continued delays in air, rail and over-the-road.”

Or as another Indago member put it, “Transportation infrastructure is definitely the burning platform that is most likely to cause catastrophic failures in the supply chain.”

What do you think? Do you agree with Kevin and our Indago members? Post a comment and share your perspective!

(Side note: I’ve known Kevin O’Meara for many years and he’s one of the smartest executives I know in the industry. Kevin was also one of my early guests on Talking Logistics. Check out this episode from April 2013).