Subscribe to our free, weekly email newsletter!


Top 50 3PLs: Seeing into the future of global logistics

Finding the right third party logistics provider (3PL) in today’s global marketplace involves looking beyond the provider’s “vision” statement, say industry experts. Yet, they also acknowledge that there’s still an element of prognostication involved once a short list of the Top 50 has been whittled down.
By Patrick Burnson, Executive Editor
June 01, 2013

One of the key takeaways from this year’s list of Top 50 Global third-party logistics providers (3PLs)—compiled by market consultancy Armstrong & Associates—is that business forecasting is becoming increasingly important to shippers when choosing the provider that best fits their needs. This notion becomes even more urgent when one considers that the 3PL market compound annual growth rate (CAGR) from 1996 to 2012 fell 0.3 percent to 10 percent.

Domestic transportation management (DTM) led financial results for 3PL segments again in 2012. Gross revenues were up 9.2%, and at the same time, the cost of purchasing transportation, increased competition, and slackened demand are pressuring DTM gross margins and net revenues. As a result, net revenues increased by only 5.4 percent. Overall gross margins were 14.6 percent—in 2011 they were 15.2 percent. However, overall 3PL earnings before interest, tax, and net income margins remained strong, ringing in at 33.2 percent and 20.3 percent of net revenue respectively.

The key to sustaining that net income trend appears to be in the top provider’s ability to anticipate market trends, say analysts.

“Third party logistics providers are good at modeling transportation and distribution networks and identifying overall shifts in demand,” notes Evan Armstrong, the consultancy’s president. “But they also have the forecasting tools associated with integrated warehousing and transportation management.”

According to Armstrong, the leading players in the value-added area of forecasting are Menlo Worldwide, Ryder SCS, APL Logistics, Genco, UTi, and DB Schenker. “Based on our findings,” he says, “these companies can be leveraged by shippers to identify key inventory deployment locations and lower-cost transportation lanes.”

Read the full article plus access to slides, research papers, in-depth analysis, and much more.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Join Transplace for this Webcast, to learn how they were able to automate manual processes by tightly integrating their transportation management system (TMS) with the portals of carriers, and 3rd party vendors in a matter of a few weeks.

Following the integration, the new Hapag-Lloyd will rank among the four largest ocean cargo carriers in the world

AgTC will provide unique market intelligence at next annual meeting in San Francisco this June

With no fuel tax increase likely ahead of this year’s mid-term elections, trucking interests in Washington are moving to Plan B in their attempt to shore up funding for badly needed infrastructure improvements.

Crowley Maritime Corporation has acquired majority ownership of Accord Ship Management (HK) Limited and Accord Marine Management Pvt. Ltd.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA