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Home » 3PLs' U.S. revenues hit a record high (again)
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3PLs' U.S. revenues hit a record high (again)

May 1, 2007
DC Velocity Staff
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Looks like it's time to update the record books. After breaking the $100 billion barrier for the first time in 2005, the third-party logistics services (3PL) market shattered its record again in 2006—this time hurtling past the $110 billion mark.

In its latest annual report on the U.S. 3PL market, consulting firm Armstrong & Associates says that U.S. gross revenues for third-party logistics companies hit $113.6 billion last year, a 9.5-percent increase over 2005's figure. That represents roughly onethird of the estimated $391 billion global third-party logistics market. U.S. net revenues were $53.1 billion.

According to the report, U.S. and Global 3PL Financial and Acquisition Results—2006, the top performer in the U.S. market was the international transportation management (ITM) segment, with a net revenue increase of 17.7 percent. Armstrong attributes that growth to continued economic expansion in the China and Asia-Pacific markets. Kuehne + Nagel, Expeditors International of Washington, DHL, and APL Logistics all turned in strong performances last year, with net income margins of 10 percent or greater compared to net revenues.

Domestic transportation management (DTM) companies, which include freight brokerages, posted a 12 percent gain in net revenues (gross margin). BAX Global, BNSF Logistics, C.H. Robinson, Meridian IQ, and NFI each grew by more than 20 percent, and Hub Group, Penske Logistics, Ryder System, and Werner grew by 10 percent or more.

Net-revenue growth for the DTM category, though, slipped from 18 percent in 2005, and net income margins dropped by 1 percent. Armstrong attributes the decline to the U.S. economic slowdown and calls it a "temporary downturn" that will have no significant long-term importance for key players in that segment.

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