Report shows accelerated 3PL growth

By Freddie Pierce
Most third-party logistics providers (3PLs) got back on track in 2010 and are sprinting in 2011. Consistent with ongoing economic globalization, the In...

Most third-party logistics providers (3PLs) got back on track in 2010 and are sprinting in 2011. 

Consistent with ongoing economic globalization, the International Transportation Management 3PL segment led with a 30.1% gross revenue (turnover) and net revenue (gross margin) increases. 

Dedicated Contract Carriage followed at 13.1%.  Overall, 3PL U.S. gross revenues jumped 18.9% in 2010 to $127.3 billion slightly exceeding the 2008 market result.)

The compound annual growth rate (CAGR) for third-party logistics market net revenue from 1995 through 2010 was 12.7%.  2009 was the only negative year since Armstrong & Associates began tracking results in 1995. 

From 2009 to 2010, the increase in 3PL net revenue was 4.7 times the rate of U.S. gross domestic product (GDP) growth.  One driving factor of 3PL growth was world trade volumes which increased 12.4% for 2010.

Revenues and profitability increased in all four 3PL segments in 2010.  Gross revenue increases ranged from 12.9% to 30.1% and were up 19.4% overall.  Net revenues (gross revenue minus purchased transportation) were up 13.2%. 

Net revenues are a better indicator of true business improvement since fuel related costs have minimal impact.  Overall, net income increased 23.4% from 2009 levels.

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 management market research and consulting firm specializing in competitive benchmarking, mergers and acquisitions, strategic planning, logistics outsourcing, centralized transportation management programs, and supply chain systems evaluation and selection. 

Edited by Kevin Scarpati

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