TIA Q3 report shows steady annual gains in brokered 3PL shipments

The Transportation Intermediaries Association’s (TIA) Third Quarter 2017 TIA 3PL Market Report, which was released this week, showed significant annual gains for key brokered freight transportation metrics. 

This is the 36th edition of this report, which is based on monthly data from TIA member companies who submit real operating data and respond to questions on business conditions impacting the 3PL sector. Types of questions that the member companies’ answers include: number of shipments by mode, total billing, and gross margins. Other data collected are customer-based forecasts to offer up expectations of near-term business volume. And this report represents more than 1.4 million shipments and more than $2.5 billion in total revenue for the third quarter of 2017, according to TIA.

Total third quarter invoice revenue for all TIA member study participants—at around $2.6 billion—was up 10.9% percent annually, and total shipments—at 1,428,332—increased 10.9%. The average invoice per shipment of $1,801 rose 4.6%, with profit margin percentage down 40 basis points to 15.5 percent.

Key third quarter metrics by mode included:

• Truckload: shipments up 11.7% annually at 974,450, with invoice amount per load up 5.5% at $1507, profit margin per load up 0.5% at $221, and profit margin percentage down 70 basis points at 14.7%;
• Less-than-truckload: shipments up 15.8% annually at 140,177, invoice amount per load up 5.4% percent at $394, profit margin per load up 9.6% percent at $82, and profit margin percentage up 80 basis points at 20.7%; and
• Intermodal: shipments—at 246,330—were up 3.6 percent annually, with invoice amount per load down 11.7 percent at $2,133, and profit margin percentage up 40 basis points at 10.4 percent

Sequentially, from the second quarter to the third quarter, TIA found that: total brokered freight shipments fell 0.8%; gross profit margin percentage increased 40 basis points to 15.5%, volumes were up for all primary modes; profit margin percentage was up 40 basis points for truckload, 30 basis points for LTL, and 10 basis points for intermodal; invoice amount per shipment rose by 2.2%, 14.8%, and 7.9% for truckload, LTL, and intermodal, respectively; and fuel saw an increase of 2.5% or $0.07 per gallon.

“The 3PLs that are contributing data to this report have been in business for a while and have secured proper capacity, and they know where to find the capacity,” said Tom Malloy, TIA vice president of membership, in an interview. “When there are shortages and the 3PLs that have the access to capacity with strong carrier networks are able to take advantage of market fluctuations, and in this [report’s data] those fluctuations have certainly been positive as there has been somewhat of a capacity crunch around the country in different markets. Being able to respond to shipper demand, coupled with the economy seems to be chugging along albeit not super-robust and crazy, looking at trends going back to the 12 months before last year’s election, things have been fairly positive in a methodical way.”

This scenario, he added, is what has led to the strong annual gains posted in the third quarter.  A primary reason for that, he explained, is that TIA members have the ability to react to that capacity and take advantage of market conditions.

“When looking at things like the annual gains in shipments and revenue, there are many encouraging numbers that are looking very positive for everyone involved,” said Malloy.