Decline in 3PL gross revenue forecast for 2009

Decline in 3PL gross revenue forecast for 2009    Turnover for third party logistics companies was down 8.8 percent in 2009, according to a study released today by the research firm Armstrong & Associates.
   The study, available at www.3plogistics.com, found that since December, 3PL revenue has nosedived on the back of diminished cargo demand. As a group, 60 percent of 3PLs are reporting lower gross and net revenues for this year, according to Armstrong.
   Among value-added warehousing 3PLs, 57 percent are reporting increased net revenues, while automotive and retail vertical industries were the main drags on 3PL market growth for 2009, with projected revenues down 32 percent and 23 percent respectively. The food and grocery vertical and 3PL returns management sub-segment are up for the year.
   Major 3PLs like Expeditors, C.H. Robinson, Kuehne + Nagel reported in the survey that net revenues have decreased 3 percent to 10 percent in 2009.
   “2008 could be remembered as ‘lackluster’ or ‘it could have been worse,' ' the research firm said. “Gross revenues for third-party logistics in the United States grew 6.7 percent in 2008. Net revenues grew 4.7 percent compared to 7.2 percent in 2007 as the logistics part of the economy continued to slow before it dove in December. We estimate that 2009 will be the first recorded negative year in 3PL gross revenue growth since we started tracking it in 1996.”
   Armstrong projects revenue to fall to $118 billion in 2009 from $127 billion in 2008.