The 3PL Market Has Shrunk For The Last Three Quarters In A Row

For years it was said that the 3PL market was growing at a double digit rate.  That is not true anymore, the 3PL market has shrunk – at least in terms of organic growth – for the last three quarters in a row.  Organic growth is based on the growth of the core business without taking into account new acquisitions. Further, I’m not sure that growth was ever really as high as some market research firms were reporting it to be.

ARC Advisory Group does an analysis of the 3PL market by analyzing the financial results of the 14 largest public 3PLs when all firms have reported their quarterly results.  Because of the differences in reporting periods, the latest analysis is based on the 3rd Quarter of 2016. Since the beginning of 2016, ARC has been doing an organic growth analysis.  ARC views this as a truer indicator of the health of the industry.

ARC’s definition of 3PL includes non-asset based transportation as well as warehousing services (called contract logistics in Europe), it does not include asset-based transportation moves. In the third quarter, organic growth was negative 1.8 percent.  For the first nine months of 2016, the market is down 3.4 percent. The author of this analysis, Naresh Surepelly, reports the decline is mainly due to uncertain global economic environment especially in Europe.  Other causes include changes in currency rates (this analysis is denominated in US dollars), slowing global trade which affects the international brokerage segment, and volatile rates.

If you are interested in the complete report, which analyses the growth of the industry in multiple segments, please contact Conrad Hanf (chanf@arcweb.com).  The companies included in the analysis include Agility, C.H. Robinson, CEVA Logistics, DHL Supply Chain and Global Forwarding, DSV, Expeditors International of Washington, Hyndai GLOVIS, JB Hunt, Kuehne + Nagel, Logwin, Panalpint, Ryder, UPS Supply Chain Solutions, and XPO Logistics.


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