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SEARCHThe third-party logistics market is volatile and in decline from a cyclical peak, according to a new quarterly report issued by the Transportation Intermediaries Association.
Sample chart from quarterly 3PL report.
Source: TIA
The third-party logistics market is volatile and in decline from a cyclical peak, according to a new quarterly report issued on May 23 by the Transportation Intermediaries Association.
TIA’s Q1 2019 3PL Market Report, which includes analysis by Noël Perry, the group’s chief economist, indicates the market for 3PL services, which TIA values at $186 billion, is “in decline,” stated Perry in a news release.
“The TIA statistics are completely consistent this quarter with a market receding from a cyclical peak, the most recent being the spectacular combination of regulatory drag and strong tonnage growth that topped out in the first half of 2019,” he explained
The quarter-over-quarter comparisons at the beginning of the report show that the current direction of the market— downward in both volumes and price-- multiplies in the revenue numbers, Perry pointed out. “It behooves our members to be prudent with cash flow based on these numbers, as further declines are likely both in the remainder of this year and through much of 2020.”
The report contains rolling eight-quarter trends, fuel price comparisons, and allows 3PLs and others to view how the industry is performing as well as to compare their business to companies of a similar size.The report also includes detailed 3PL activities by transportation mode and measures comparative volume, revenue, margin and margin percentages, both quarterly and year over year.
The publication 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.
“Many members are reporting revenue down, but due to technology investments and the difference between spot and contract rates, their net revenue is up despite what looks like a downturn,” commented TIA President and CEO Robert Voltmann.
TIA, based in Alexandria, Virginia, represents transportation intermediaries of all disciplines, doing business in domestic and international commerce.
The 2019 Q1 3PL Market Report is available for purchase on the TIA website.
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