Data on the third-party logistics market from the first quarter paints a picture of a market sliding toward recession, even before the impact of COVID-19 pandemic hit, according to the Transportation Intermediaries Association.
TIA’s First Quarter 2020 TIA 3PL Market Report was showing indications of a conventional recession – probably a mild recession, according to TIA Chief Economist Noël Perry.
One disappointment, he said, was a drop in margin percent for the brokers and third-party logistics providers that make up TIA's membership – something that has not happened on the approach to recession before. 3PLs’ average gross margin fell from 17.5% in the first quarter of 2019 to 15.8% in the first quarter of 2020.
The report represents more than 1.3 million shipments and over $2.6 billion in total revenue for the first quarter of 2020.
- The total number of shipments was down slightly, from 1.37 million in 2019 to 1.33 million this year.
- Total revenue dropped from 2.84 million to $2.6 million.
- The average invoice amount per shipment was $1,960, down from $2,071 a year ago.
TIA’s 3PL Market Report is based on monthly data submissions and surveys of TIA members who provide current operating data and answer questions on business conditions affecting the 3PL industry. It contains rolling eight-quarter trends and fuel price comparisons, allowing 3PLs and industry observers to view how the industry is performing as well as to compare their business to companies of a similar size. Additionally, the report includes detailed 3PL activities by transportation mode and measures comparative volume, revenue, margin, and margin percentages, quarterly, and year over year.