it's a good time to be a 3PL

Will the party ever end? Once again, third- party logistics service providers (3PLs) appear overwhelmingly optimistic about their future. Results of an annual survey show that members of the International Warehouse Logistics Association (IWLA) expect another banner year in 2006.

Nearly nine in 10 respondents to IWLA's recent Business Outlook survey expect revenues to grow this year. Nearly a third, 31 percent, predict double-digit revenue gains over 2005 figures. Just 5 percent expect a drop in sales, while 8 percent believe sales will remain flat in 2006.

"Business is very strong across the board," says Bruce Abels, president of Saddle Creek, an Atlanta-based third-party service provider. "Right now, we're feeling pretty good about the business. And when I talk to others, they're bullish about the business [too]."

To keep up with demand, IWLA members are expanding their businesses—literally. Some 46 percent of the survey respondents reported that they had increased their square footage in 2005 (compared to a modest 36 percent in 2004). And 19 percent said they had increased their square footage by 10 percent or more. That growth trend appears set to continue in 2006. Some 55 percent of the survey respondents plan to add warehouse space this year, including 23 percent who plan to expand capacity by 10 percent or more.

IWLA members are also beefing up their staffs. A full 56 percent of the survey respondents increased headcounts last year, while nearly two-thirds expect to add staff in 2006. Temporary staffing is expected to show similar growth.