United States 3PL market growth outpaces economy

Apr 3, 2003 12:00 PM, from staff and wire reports

For the eighth consecutive year, growth in third-party (3PL) contract logistics in the United States has exceeded growth in the nation’s economy. Results for 2002 show increases in turnover, net revenues, and net income, according to Armstrong & Associates Inc. Turnover rose by 6.9% and net revenues by 7%. Net income advanced from 1.7% in 2001 to 3% in 2002.

Results for individual companies varied widely, says the Stoughton WI-based supply chain management consulting firm. The most profitable 3PLs continue to be transportation managers. C H Robinson, Landstar Logistics, and Expeditors all had double-digit, after-tax net margins. All three companies had significant net revenue growth again this year. While turnover increased for the US domestic transportation segment led by Robinson and Landstar, net revenues for the segment were flat because 3PLs with leasing and IMC parent companies had reduced revenues.

Dedicated contract carriage net revenue climbed by 5.7% in 2002 after a flat 2001. Leasing company-related dedicated carriers continued to lose market share. J B Hunt, Swift, and Werner Enterprises all had double-digit growth. These dedicated operations spring from truckload carrier backgrounds and have the sustained advantage of relying on parent company trucking networks to reduce backhaul miles and costs.