3PL market tops $339 billion, says analyst

3PL market tops $339 billion, says analyst    The global third-party logistics market was worth $339 billion in 2004, led by revenues of $117 billion in North America, according to the latest estimate by industry analyst Richard Armstrong.
   3PL sales totaled $89 billion in the United States, up from $77 billion in 2003, said Armstrong, the head of Stoughton, Wis.-based Armstrong & Associates, during a presentation at the Council of Supply Chain Management Professionals conference in San Diego last week.
   Companies in Europe outsourced logistics to the tune of $113 billion, with most of the logistics activity in the 17 “old” members of the European Union.
   Armstrong said the 3PL market grew 14.2 percent last year and expected the 3PL industry to continue double-digit growth. Armstrong, who specializes in domestic logistics, acknowledged that his international logistics figures were not quite as precise but were a fair representation of the overall market.
   Dedicated contract carriage is experiencing a revival of sorts in the U.S. market, because shippers are looking for ways to lock in scarce capacity. Dedicated carriage historically has been a 4-percent margin business, but Armstrong said that might not be a bad return for business that essentially is guaranteed if the contract protects the logistics provider from assuming assets when the deal is terminated.