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 - LM Editorial

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

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

There are so many ways to analyze the state of truckload capacity, and on top of that there is, perhaps, no other facet of freight transportation that is so directly impacted by myriad moving parts, whether it be driver availability, rates, demand, weather, the economy, and, of course, federal regulations, among others.

The ATA said that the annualized turnover rate for large truckload carriers, which it defines as truckload fleets with more than $30 million in revenue, increased 3 percent to an annualized rate of 87 percent in the second quarter.

If you want to meet some of the most ticked-off people on the planet, talk to any trucking industry retiree who received that letter from the Teamsters’ Central States pension plan notifying them of their potential financial haircut coming in retirement.

Global express delivery and logistics services provider DHL introduced a new flight geared towards Michigan-based importers and exporters out of the Detroit Metropolitan Airport.

With the sinking of the El Faro last week, and the resulting deaths of its entire crew of 33, the viability of the Jones Act is again being called into question.


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