Survey finds 3PLs predicting slow recovery

Survey finds 3PLs predicting slow recovery

Armstrong

   First quarter third-party logistics provider revenue is down 6.7 percent compared to the first quarter of last year, according to a survey by Armstrong & Associates Inc., the Stoughton, Wis.-based supply chain and logistics research firm.
   Of the survey respondents, 53 percent said revenue was down while 37 percent said revenue improved primarily due to new business.
   Respondents to the survey felt the economic recovery would be relatively slow. They expect revenue for 2009 to be down 4.6 percent Armstrong estimates 2008 revenue for U.S. 3PLs at $128 billion.
   The company said international transportation management including freight forwarding, non-vessel-operating common carrier, and related 4PL activities, saw first quarter revenue drop 14.6 percent from the prior year reflecting the steep decline in international trade and container movements, while domestic transportation management, including freight brokerage and systems-based transportation management, saw a 10.9 percent decline, reflecting the drop in North American truck traffic.
   Armstrong said value-added warehousing and distribution, including contract logistics, has been impacted less, with revenue down 4.3 percent. It said dedicated contract carriage is down 11.9 percent following the trucking trend reported by the American Trucking Associations.
   3PLs report industry verticals were impacted differently with automotive 3PLs being the hardest hit with a 37.5 percent decline in revenue. On the other hand, it said the food and grocery segment is off only 0.1 percent.
   Richard Armstrong, chairman of Armstrong & Associates Inc., said “recent up-ticks in transportation volume and consumer spending indicated that we have bottomed out. The question now is whether the recovery will be V or L shaped. Company results are very mixed, but 3PLs as a group should bounce back quickly. Non-asset based players are particularly resilient.'