New Armstrong & Associates report highlights impact of Covid-19 and economy on 3PL sector

发布的一份新报告自供应茶n consultancy Armstrong & Associates Inc. provides a comprehensive overview of the current state of the third-party logistics (3PL) market. Entitled “VOLATILE—Latest Third-Party Logistics Market Results and Predictions for 2020 Including Estimates for 190 Countries,” the report takes a deep dive into myriad subsets of the 3PL industry, including Value-Added Warehouse Distribution (VAWD), Dedicated Contract Carriage (DCC), Domestic Transportation Management (DTM); and International Transportation Management (ITM).

A key theme of the report pertained to ecommerce, which Armstrong said is the most rapidly-growing 3PL segment, due to retailers’ reliance on global ecommerce giant Amazon and 3PLs to navigate omnichannel and ecommerce operations. This is a trend that is not going to abate anytime soon, with ecommerce revenues hitting $43.4 billion in 2019, with the expectation of 28% CAGR (compound annual growth rate) through 2020, driven by continued ecommerce activity and shippers outsourcing logistics operations, as opposed to developing their own internal fulfillment operations.

Looking at its key 3PL segments, Armstrong reported the following, for the first half of 2020:

-VAWD gross revenue decline was off 7.1%, for the first half of 2020, with gains in e-commerce and B2B declines. Net revenue was off 5.8%. Armstrong said the third and fourth quarters will see incremental gains driven by gradual economic recovery and shippers restoring inventory;
-DCC gross revenue fell 3%, with net revenue seeing a slight decline. Armstrong noted that the COVID-19 economic volatility in domestic transportation, coupled with demand gains, should have a positive impact for growth over the remainder of 2020, with shippers looking for a “safe haven” for capacity;
-DTM gross revenue was off 8%, with net revenues falling 16%, due to declining shipments across all modes, specifically for shippers in the auto, industrial, building/construction, and elements/raw materials sectors; and
-ITM gross revenue was up 3.8%, with the firm noting that second quarter ocean and air volumes declined, with tight ocean capacity, which led to steep rate hikes compared to 2019 and boosted gross revenues. The air cargo sector lost its commercial airline belly space, due to COVID-19, while ocean container capacity was hampered because of blank sailings from Asia

For 2019, Armstrong stated in the report that U.S. 3PL market net revenues, which are gross revenues minus purchased transportation, headed up 5.9%, to $91.5 billion, and overall gross revenues dropped 0.3%, with total U.S. 3PL net revenues at $212.8 billion. And, for 2020, it expects U.S. 3PL gross revenues to be down less than 1%, with a slight net revenue increase.

On the global 3PL side, the report said 2019 global 3PL logistics revenues rise 2.1%, to $951 billion, compared to 2018, with a 2020 2.9% annual decrease expected, due to COVID-19 and trade war issues.