FOR IMMEDIATE RELEASE

U.S. and Global Third-Party Logistics Market Analysis is Released

STOUGHTON, WI, May 24, 2010 – 2009 wasn’t a pretty year for 3PLs.  In lock step with the global economic nose dive, domestic revenues for the third-party logistics (3PL) market sank.  Hardest hit was the International Transportation Management (ITM) segment with gross revenue (turnover) falling 23.7% as total U.S. import and export ocean TEUs (trailer equivalent units) dropped 12.3%.¹  Airfreight metric tons dropped similarly with reductions at JFK and the Chicago airports exceeding 20%.  As prices dove in the face of soft demand, net revenues (gross margins) shrank by 18.9%.  Expeditors International, the largest U.S. freight forwarder, saw gross revenue decrease 27% and net revenue decrease 14%.  The good news is that first quarter 2010 results have included double digit improvements in ITM and other 3PL market segments as the economy steadily recovers.

Figure 1.  U.S. 3PL Market 1996 – 2010E (US$ Billions)

Overall, U.S. 3PL market gross revenues decreased 16% in 2009 dropping to $107.1 billion.  Dedicated Contract Carriage (DCC) fell 16%.  Domestic Transportation Management (DTM) was down 15.1% in gross revenue and 11.4% in net revenue.  Value-Added Warehousing and Distribution (VAWD) suffered with only single digit reductions.

Table 1.  Revenues and Profitability by 3PL Segment – 2009

  *Total 2009 gross revenue (turnover) for the 3PL market in the U.S. is estimated at $107.1 billion.

  $3 billion is included for the contract logistics software segment.

The VAWD segment’s gross and net revenues were both down 5.3% and 6.9% respectively compared to 2008.

Net income margins dropped in all categories.  The ITM segment was the least affected with a 6.3% drop.  VAWD took the biggest hit with a 25% drop.  Overall, 3PL net income margin dropped from 5.3% in 2008 to 4.7% in 2009.

We anticipate a significant recovery for 3PLs in 2010.  Many first quarter results suggest a recovery that will restore the third-party logistics market to 2007 levels, and we predict 13.4% growth in gross revenue and 8.3% growth in net revenue in third-party logistics for 2010.

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¹The Journal of Commerce estimate.

The complete report and other Armstrong & Associates research can be found at: http://www.3plogistics.com/shopsite/index.html.

About Armstrong & Associates, Inc.:

Armstrong & Associates, Inc. is a supply chain market research and consulting firm specializing in 3PL market research, provider benchmarking, strategic planning, mergers and acquisitions, logistics outsourcing, centralized transportation management programs, and supply chain systems evaluation and selection. Armstrong & Associates publishes Who’s Who in Logistics and Supply Chain Management – The Americas and Who’s Who in Logistics and Supply Chain Management – International. Recent research papers include Warehousing in North America – 2009 Market Size, Major 3PLs, Benchmarking Costs, Prices and Practices, and Trends in 3PL/Customer Relationships.

For more information, please contact:

Richard Armstrong at +1-800-525-3915, or email Dick@3PLogistics.com.

Source:

Armstrong & Associates, Inc.

100 Business Park Circle, Suite 202

Stoughton, WI 53589 USA

Phone: +1-608-873-8929 Fax: +1-608-873-5509

Website: www.3PLogistics.com

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