FOR IMMEDIATE RELEASE
Hanging Tough – 3PL Market and Financial Results Released
STOUGHTON, WI, April 29, 2008 – Despite an ongoing freight recession in 2007, U.S. third-party logistics service provider (3PL) revenues grew to $122 billion. Growth was 7.4% in gross revenue (turnover) and 7.2% in net revenue. World revenues grew to $487 billion driven by Asian results.
3PL revenue growth was highest in non-asset transportation management. Overall growth continued a pattern of being more than three times the growth in U.S. gross domestic product (GDP). 3PL growth continues to be driven by companies outsourcing to concentrate on core competences, the need for sophisticated supply chain information technology solutions, and globalization.
Armstrong & Associates, Inc. projects that U.S. 3PL revenues will exceed $150 billion in 2010 after a modest year (5.5% increase) in 2008 and an improving year (7.5% increase) in 2009.
Net revenue for International transportation management (ITM) including Expeditors Int’l, Kuehne + Nagel and DHL Global Forwarding grew by 9.5%.
Domestic transportation management (DTM) grew 8% with net income margins averaging 13.4%. DTM includes freight brokerage and related value-added services. C.H. Robinson dominates DTM with 34% of net revenues and 66% of EBIT.
Third-party logistics continued to consolidate in 2007. Strategic purchases and private equity investments continued across functionalities. Wall Street analysts became concerned about the inherently lower profit margins in VAWD. In addition, investors continued their preferences for non-asset based activities.
The complete report can be obtained online at: https://www.3plogistics.com/shopsite/index.html.
Armstrong & Associates’ Extended Information Service subscribers will receive the report this week.
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 North American Logistics and Supply Chain Management and Who’s Who in International Logistics and Supply Chain Management. Recent research papers include Warehousing in North America, RFP Activity and Expected Profit Margins for 3PLs, Trends in 3PL/Customer Relationships, and Third-Party Logistics: Size and Scale Classification.
For more information, contact: Richard Armstrong +1-800-525-3915 or e-mail Dick@3PLogistics.com.
Source: Armstrong & Associates, Inc.
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Stoughton, WI 53589 USA