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3PL Market Going Strong Due to Stronger Economy, E-Commerce, Tight Warehouse Space

6/20/18 10:28 AM / by Varsity Logistics

 

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The third-party logistics (3PL) market is going strong according to a June 2018 report released by Armstrong & Associates, a market research firm located in Milwaukee.

 

The report found that 2017 net revenues in the U.S. rose to $77.1 billion in 2017, a 5% increase from the previous year. Gross revenues reached $184.3 million, a nearly 11% increase. The net revenue increase repeats a year-to-year pattern of single-digit growth.

 

Armstrong & Associates Chairman Dick Armstrong said in a statement that 2018 net revenue will likely reach 5%, with gross revenue closer to 10%. “It should be a good year overall,” he said.

 

The segment largely responsible for the steady growth is Dedicated Contract Carriage (DCC) revenue, which increased 10% in 2017, above its steady annual growth rate of 7% since 1995. Increasing rates and limited truck capacity has helped maintain growth in the DCC segment.

 

Other segments that were strong last were included:

 

  • Domestic Transportation Management (DTM). Gross revenues spiked 16% to $72 billion; net revenues were up 6% to $11 billion.
  • International Transportation Management (ITM). Gross revenues climbed nearly 11% due to tight air freight capacity and the growth in global e-commerce. Net revenues increased 4%.
  • Value-added Warehousing and Distribution (VAWD). Both gross revenue and net revenue were each up nearly 3% due to tight warehouse capacity across the U.S.

What kind of year did you have in 2017? Do these numbers reflect the factors that led to your year-end figures? Let us know in the comments below!

Topics: IBM, Supply Chain, Logistics Software, Varsity Logistics, 3PL, ecommerce

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