Subscribe to our free, weekly email newsletter!


Top 50 3PLs: Will mergers and acquisitions alter the third party logistics landscape?

A flurry of major service provider deals captured mainstream headlines in recent months, but the consequence of this activity has yet to be measured by domestic and international shippers. Meanwhile, the EU flounders, Asia remains strong, and emerging nations may represent the next great opportunity for the major 3PL players.
By Patrick Burnson, Executive Editor
June 01, 2012

Modest growth forecast
Principals at Armstrong & Associates maintain that growth in the sector will be sustained, but sluggish. “After surveying our 3PL tracking group and seeing the final 2011 results, our initial estimate of 12.9 percent growth in the international transportation management [ITM] segment has been revised down,” says consultancy president Evan Armstrong. “With the European economy in decline and Asia cooling, ocean freight revenues expanded slightly, but could barely counteract the decline in airfreight revenues.”

Armstrong notes that this is more of a continuation of 2010, with domestic transportation management doing well and the value-added warehousing and distribution segment remaining steady. “Beyond that, dedicated contract carriage, which is the most mature of the 3PL market segments, should be able to grow 4 percent as providers keep a lid on capacity and manage fleet asset additions.”

At the same time, Armstrong expects ITM net revenues to grow 3 percent in 2012. Domestic transportation management should continue to lead the way, with approximately 10 percent net revenue growth this year.

“It’s a good time to be an integrated 3PL with business in multiple 3PL segments,” says Armstrong. “Most large 3PLs have internal lead logistics providers [LLP] groups that tend to focus on process re-engineering, continuous improvement, and information technology deployment for improved ‘control tower’ supply chain management.”

Part of Armstrong’s forecast also suggests that most global 3PLs will conduct modal shifts away from airfreight and express modes to lower cost transportation alternatives to save money through the tepid economic recovery. “Tighter inbound transportation control and overall network optimization means that providers that can meet the required service standards will continue to be the 3PL leaders,” he adds.

This may explain why there was no change among the seven leading global 3PLs in this year’s ranking. Like 2011, DHL Supply Chain & Global Forwarding leveraged its extensive integrated global footprint. Armstrong says that Kuehne + Nagle is still the largest “pure” ocean freight forwarder with over 2.9 million twenty-foot containers (TEUs) managed in 2011.

“C.H. Robinson Worldwide continues to expand globally and has added operations in Mumbai and Shanghai,” says Armstrong. “While still growing, one must remember that only 8 percent of Robinson’s revenues are derived outside of the United States.”

Advancing companies include Norbert Dentressangle, which is continuing to expand beyond Europe, and Toll Holdings, which has expanded its Southeast Asia operations and overall global network. Armstrong says that Agility has had the most dramatic decline, dropping from number 16 to number 21 mainly due to past legal complications with U.S. government clients.

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

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

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