3PL News: Armstrong says 2009 3PL revenues down 15.1 percent

By Jeff Berman, Group News Editor
May 25, 2010 - LM Editorial

Supply chain consultancy Armstrong & Associates this week released updated figures for 2009 U.S. third-party logistics market revenues.

This data, which was originally released in February, confirmed that U.S. 3PL revenues dropped for the first time since Armstrong began collecting the data in 1995.

For 2009, Armstrong said that total 3PL segment gross revenues at $104.1 billion decreased 16.0 percent while net revenues at $50.9 billion were down 12.7 percent.

Data for the survey was based on 3PL reported year-end financial results coupled with results from Armstrong’s August 3PL report on the feedback of roughly 40 U.S. 3PLs. The August survey found that 72 percent of participating 3PLs reported gross revenue decreases while 24 percent reported increases in gross revenue for the first half of 2008 compared to the first half of 2009.

Individual market segments showed:
-domestic transportation management gross revenue at $31.8 billion was down 15.1 percent year-over-year, and net revenue at $5.2 billion was down 11.4 percent year-over-year;
-international transportation management gross revenue at $35.1 billion was down 23.7 percent year-over-year, and net revenue at $14.6 billion was down 18.9 percent year-over-year;
-dedicated contract carriage (DCC) gross revenue at $9.5 billion was down 15.2 percent year-over-year, and net revenue at $9.4 billion was down 16.0 percent year-over-year; and
-value-added warehousing and distribution (VAWD) gross revenue at $27.8 billion was down 5.3 percent year-over-year, and net revenue at $21.9 billion was down 6.9 percent year-over-year.

While the majority of revenue figures were down across the board, Armstrong & Associates President Evan Armstrong told LM that much of the 2009 losses could be attributed to individual market factors. For example, the DCC segment saw significant 2009 losses because a good chunk of its business is dependent on the automotive industry.

“For most 3PLs, the best part about 2009 [looking back now] is that it’s over,” said Armstrong.

Heading into this year, third party performance in 2010 was viewed as likely to be “less than stellar,” said Armstrong who said in a February interview that projected gross revenue is expected to be up 7.2 percent year-over-year compared to previous years (excluding 2009), which were all up 13 percent or better year-over-year.

But Armstrong officials said that they now anticipate a significant recovery for 3PLs in 2010, with many first quarter results suggesting a recovery that will restore the U.S. 3PL market to 2007 levels. Armstrong is now calling for a 13.4 percent increase in gross revenue and an 8.3 percent increase in net revenue.



About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(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

Earlier today, the United States Senate signed off on a six-year surface transportation authorization, according to various media reports. The bill, entitled the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, passed by a 65-34 margin and comes at a time, when the most recent extension for surface transportation funding expires tomorrow, July 31.

Demand for the $500 million in available funding for the United States Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) competitive grant program was easily trumped, with applications for the seventh round of TIGER grants coming in at $9.8 billion, or nearly twenty times the available amount, DOT said this week.

Global logistics managers will be tracking the progress of the controversial Trans-Pacific Partnership (TPP) talks in Maui, Hawaii this week, as negotiating parties hope to finalize the agreement.

As has been noted in recent coverage on this site in regards to Peak Season, one underlying theme has been, and remains, how Peak Season is not what it used to be. That is not to say there will not be any Peak Season-related activity. Make no mistake, there will be and things driving it from the seasonal nature of business activity and cargo flows to higher demand and increased e-commerce activity, among others.

UPS Access Point locations serve as a replacement delivery address when consumers are not at home to receive a package or when consumers want a delivery to go somewhere other than their residence.

Article Topics

News · TMS · Logistics · All topics

About the Author

Jeff Berman, News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman.

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA