The latest analysis of the U.S. and global third-party logistics markets from Armstrong & Associates documents just how ugly a year 2009 was for 3PL providers.
Hardest hit was the International Transportation Management (ITM) segment with gross revenue falling 23.7 percent as total U.S. import and export ocean TEUs dropped 12.3 percent. Airfreight metric tons dropped similarly with reductions at JFK and the Chicago airports exceeding 20 percent. As prices dived in the face of soft demand, net revenues shrank by 18.9 percent.
Overall, U.S. 3PL market gross revenues decreased 16 percent in 2009, dropping to $107.1bn. Dedicated Contract Carriage fell 16 percent. Domestic Transportation Management was down 15.1 percent in gross revenue and 11.4 percent in net revenue. Value-Added Warehousing and Distribution (VAWD) suffered with only single-digit reductions. The VAWD segment's gross and net revenues were both down 5.3 percent and 6.9 percent, respectively, compared to 2008.
The good news is that first-quarter 2010 results have included double-digit improvements in ITM and other 3PL market segments as the economy steadily recovers. Many first-quarter results suggest a recovery that will restore the third-party logistics market to 2007 levels, and Armstrong & Associates predicts 13.4-percent growth in gross revenue and 8.3-percent growth in net revenue in third-party logistics for 2010.
