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  June 20th, 2017 | Written by

US 3PLs Had Mediocre Year in 2016, Says Armstrong Report

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  • Big 3PL mergers and acquisitions fell in 2016.
  • The biggest 3PL M&A deal in 2016 was FedEx’s acquisition of TNT Express.
  • Value-added warehousing increased 1.9 percent in 2016 on tight capacity.

2016 was a mediocre year for third-party logistics in the United States, according to a report recently released by Armstrong & Associates. Third-party logistics net revenues grew 2.1 percent over 2015 to $73.5 billion, while overall gross revenues increased 3.5 percent, expanding the total US 3PL market to $166.8 billion.

Big mergers and acquisitions changed the face of third-party logistics from mid-2014 through 2015, but last year the pace of these deals “slackened significantly,” according to the report. The biggest deal was FedEx’s acquisition of TNT Express in the second quarter. Other big deals were DSV’s acquisition of UTi Worldwide in January and HNA Group’s purchase of Ingram Micro for $6 billion.

In 2016, the domestic transportation management (DTM) segment increased 5.3 percent in gross revenue and seven percent in net revenue. “Domestic Transportation Management 3PLs (DTMs) tightened up operations in an effort to compensate for ample truck capacity,” said the report.

International transportation management (ITM), which had strong growth 10 years ago, grew 2.6 percent in gross revenue, but net revenue fell 1.9 percent. “ITM, like DTM, was negatively impacted by too much air and ocean capacity in the market,” the report noted.

Dedicated contract carriage (DCC) grew 3.5 percent. Segment leader, Ryder, was up 14 percent.

Value-added warehousing and distribution (VAWD) increased 1.9 percent on tight capacity and warehouse utilization.

Global 3PL revenues reached $802 billion in 2016, according to the report, and are on track to exceed $962 billion in 2020.