On October 15-17th, third-party logistics (3PL), technology, and investment leaders convened at Armstrong & Associates’ 3PL Value Creation North America Summit in Chicago to discuss trends in the $951 billion global 3PL market.
Many of the 3PL panelists reported double-digit growth in 2018 followed by “good, but not great” growth in 2019. E-commerce has continued to stimulate opportunities, but uncertainty caused by trade wars and import tariffs have impacted activity, acquisitions, and decision making.
The trade war with China has generated some shifts in international supply chains and conservative decision-making approaches by customers.
E-commerce has become a growth driver in all 3PL segments and working with or against Amazon remains a hot topic.
Tightening on the lending side and uncertainty in the market has slowed down M&A activity in 2019. Investments and acquisitions are still occurring for organizations that offer a strategic service, human capital, or technological synergy to the partnership.
Technology and innovation vary tremendously by customer need. Value can be added through systems already in use or by seeking out a new solution.
A record 2018 has been followed with a “good” 2019 with fewer projects in the pipeline and pent up activity. Value-added services offer a way to differentiate.
While growth has softened compared to 2018, many feel that 2019 will finish well. Industry changes, trade wars, the looming election, and rising competition have led to a feeling of general uncertainty going into 2020 and beyond.