2005 may have been a bad year for newspapers and the movie industry, but it was a record-breaker for third-party logistics service providers (3PLs). U.S.-based 3PLs' annual earnings broke the $100 billion mark last year. Surging 16.1 percent over 2004 earnings, the industry's gross revenues for 2005 hit $103.7 billion, according to a recent market analysis from Armstrong & Associates.
The biggest winners were companies that provide domestic transportation management services, a category that includes freight brokers. Gross revenues for this sector were $30.3 billion. And though they collectively reported an 18.3-percent gain in net revenues, some, like C.H. Robinson, Landstar, Meridian IQ and Schneider Logistics, grew 30 percent or more in 2005 versus 2004.
Not far behind were 3PLs that specialize in international transportation management probably no surprise given the continuing surge in global trade. Their net revenues increased 13.6 percent. Leaders in this segment (based on revenue) were Expeditors International, Kuehne + Nagel and UTi. Benefiting from a severe shortage in truck capacity, assetbased domestic transportation management companies also reported strong earnings. This market segment, which includes J.B. Hunt, Werner and Cardinal, experienced its second straight year of double-digit growth (10.2 percent).