Strong growth for 3PLs

By Staff -- Modern Materials Handling, 2/1/2000

Third party logistics providers (3PLs) grew 16.5% in 1999 according to Armstrong & Associates, Inc. Warehouse-based integrated services grew 16%. Domestic transportation management and dedicated contract carriage grew 18%. Also, non-asset based international transportation management grew 11%, as Asian economic difficulties slackened.

"Armstrong estimates total U.S. based 3PL revenue amounted to $46 billion in 1999. Overall net profitability was 5%. Net 3PL revenues were $25 billion. According to Armstrong, overall growth should continue in the 15-20% range for 3-4 more years. "Many Fortune 500 companies have not outsourced transportation, warehouse, and inventory management functions that are not parts of their core competencies," says Armstrong. "E-commerce fulfillment will add new possibilities and revenue for traditional 3PLs."

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