TIA: 3PL revenues fall despite increased volumes in Q4 2015

Total shipments for third-party logistics providers grew 8.5 percent in the fourth quarter, but total revenues fell 4.7 percent compared to the same 2014 period, according to a recent benchmarking report from the Transportation Intermediaries Association.    Total volumes for third-party logistics providers grew 8.5 percent to 1.3 million shipments in the fourth quarter of 2015 compared to the fourth quarter of 2014, according to a recent report from the Transportation Intermediaries Association. Total shipments decreased 5.3 percent from the third quarter of 2015.
   Fourth quarter revenues for 3PLs, on the other hand, dropped 7.8 percent overall to nearly $2.3 billion compared with the same 2014 period.
   TIA earlier this week released its “Fourth Quarter 2015 3PL Benchmarking Report,” which is based on a monthly survey of TIA members submitting operating data and answering questions on business conditions in the freight brokerage industry. The report separates performance into six core services offered by 3PLs: over-the-road truckload, less-than-truckload (LTL), intermodal rail, airfreight, warehousing and other miscellaneous services.
   According to the report, truckload and intermodal shipments were up 13 percent and 3 percent, respectively, compared to the fourth quarter of 2014, while LTL shipments fell 7.5 percent. 
   The year-over-year volume gains in the fourth quarter of 2015 are an encouraging sign for the 3PL industry, said Mark Christos, a member of the TIA Board of Directors, chair of the TIA 3PL Market Report and vice president at Matson Logistics.
   “That has been pretty consistent and that has been, perhaps, the most encouraging part in that this is not a flash in the pan type of thing, with shippers using 3PLs and brokerages,” he said. “We have seen consistency, and the numbers reflect that. It is a very good sign and shows that 3PLs are providing good service, and carriers are also relying on 3PLs, with shippers, carriers, and 3PLs working well together. It feels very balanced in terms of this collaboration.”
   Christos noted the decline in shipments from the third quarter reflects shifting supply chain patterns in terms of inventory management and traditional peak season surges.
   “What this may indicate is that peak is not what it used to be, as well as that shippers are managing inventory differently, too,” he said.
   Looking forward to the first quarter of 2016, Christos said he expects shipment volumes to be similar to the fourth quarter of 2015, characterizing the current market as “calm” due to low fuel prices and relatively stable capacity.
   The Transportation Intermediaries Association is the U.S. representative for the International Federation of Freight Forwarder Associations and the only professional organization exclusively representing transportation intermediaries of all disciplines, doing business in domestic and international commerce.