3PL Market’s Organic Growth Shrinks Three Quarters in a Row in 2016

Author photo: Naresh Kumar Surepelly
ByNaresh Kumar Surepelly
Category:
ARC Report Abstract

The third-party logistics (3PL) market − encompassing non-asset-based transportation, warehousing, and integrated supply chain services − experienced a year-over-year growth of 1.8 percent in revenues in the third quarter of 2016.  The growth was mainly driven by acquisitions. Organic growth (without the effect of acquisitions) declined in all three quarters of FY2016 - by 8.9 percent in Q1, 6.9 percent in Q2, and 3.4 percent in Q3.  This decline is mainly due to uncertain global economic environment especially in Europe, lower cost of transportation, and the continuous pressure on fuel rates. 

Categories of 3PLs
The scope of coverage includes non-asset based transportation, and warehousing services (called contract logistics in Europe) as follows:

  • Non-asset based domestic transportation services (broker-age/domestic freight forwarding and managed transportation services)
  • Non-asset based international transportation services (freight for-warding, customs services)
  • Warehousing services (warehousing and associated services such as packaging, light assembly, sequencing goods for a factory line)

     

     

Out of this report’s scope are revenues from asset-based transportation moves (truckload, less than truckload, parcel/express, rail, ocean, air, etc.).  The analysis is based on revenues reported by public companies on a quarterly basis that break out their revenues in the segments mentioned above. 

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Keywords: Third-Party Logistics (3PL), Contract Logistics, Non-Asset Based Domestic, Non-Asset based International, Freight Forwarding, ARC Advisory Group.

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