3PL revenues see annual gain in first quarter, according to TIA report

By Jeff Berman, Group News Editor
July 22, 2013 - LM Editorial

As a whole, market conditions in the third-party logistics (3PL) sector appear to be holding up well, despite the uneven nature of the economy, according to the 1st Quarter 2012 TIA 3PL Market Report by the Transportation Intermediaries Association (TIA).

TIA officials said this is the 18th edition of this report, which was initially released in April 2009. It focuses on 3PL industry trends and practices, with an objective to provide a representative understanding of what is happening in the 3PL industry.

Data for the report is based on confidential feedback from 33 TIA member companies, whom answer questions on various topics, including: 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.

Total revenue in the first quarter for all TIA member study participants—at roughly $2.27 billion—was up 3.0 percent compared to the first quarter of 2012, and total shipments—at 1,307,062 saw a 3.2 percent annual increase. First quarter invoice amount per shipment—at $1,739—dipped 0.2 percent annually, and profit margin—at 13.6 percent—was off by 0.7 percent.

According to the report, nearly 98 percent of 3PL revenue cited came from truckload, intermodal, or less-than-truckload at 72 percent, 18 percent, and 8 percent, respectively, with each of these modes seeing annual gains in shipments.

Truckload shipments were up 3.1 percent annually, and LTL shipments were up 2.6 percent, with intermodal was up 2.0 percent. Revenues for truckload, LTL, and intermodal were up 2.4 percent, 6.5 percent, and 4.0 percent, respectively.

Mark Christos, a member of the TIA Board of Directors, Chair of the TIA 3PL Market Report and vice president at Matson Logistics, said in an interview that one of the biggest takeaways of the report was that there was similar shipment growth in each of these three primary modes that the participating 3PLs offer to their shipper customers.

“In the past, that has seen some volatility, due at times to one certain mode being down” he said. “But there was similar growth among the three this time, which is encouraging.”

While that across the board shipment growth could portend economic consistency, Christos noted that specifically within LTL and intermodal 3PLs are focusing on expanding those service offerings, which resultant of their customers needs.

What’s more, he said this growth is likely due to a combination of 3PLs leveraging these modes through brokerage services and also industry-specific services they are providing for shippers.

“It is hard to speculate what is going on inside each 3PL’s organization in terms of what they are doing,” he said. “They are trying to offer more services to customers and going into the truckload, LTL, and intermodal carrier communities and finding carriers that support 3PLs to expand with those modes.”

The report said that total fuel expenses for the first quarter of 2013 increased 1.5 percent annually. Christos said that this increase has some effect on the findings but stressed that the competitive environment for 3PL’s has a much more influential impact in terms of the balance of capacity.

And the gains for invoice amount per load at 2.0 percent, 3.8 percent, and 2.0 percent for truckload, LTL, and, intermodal, respectively, speaks to tighter capacity and demand for those services, said Christos, noting that it appears that brokers have been successful in increasing pricing.

“What is happening is that pricing has not accelerated as fast as costs and that is why profit margin percentages have dropped a bit,” he noted.

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

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.

The average price per gallon for diesel gasoline increased 1.6 cents to $2.492 per gallon, according to data issued by the Department of Energy’s Energy Information Administration (EIA) this week.

The planned $4.8 billion acquisition of Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator, by FedEx may be showing signs of coming closer to fruition, with TNT’s shareholders formally giving their blessing on the proposed deal.

Article Topics

News · 3PL · TIA · 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.


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