SAN ANTONIO, Tex.–Today, the 21st Annual Surveys of Third-Party Logistics Provider CEOs, sponsored by Penske Logistics, revealed that 3PL CEOs are confident about the current state and future revenue growth of their companies and the regional 3PL industries.
The annual surveys, which this year included the CEOs of 27 of the world’s largest 3PLs, found that approximately 75 percent of the companies involved in the surveys were profitable in 2013. North American and Asian-Pacific CEOs forecasted three-year company growth of 10.77 percent and 16.2 percent, respectively. European CEOs forecasted 8.33 percent growth over the same period.
The CEOs were also asked to project regional 3PL industry revenue growth rates for the next three years in all three regions. North American CEOs projected average revenue growth rates of 6.54 percent; European CEOs projected average revenue growth rates of 4.17 percent; and CEOs in the Asia-Pacific region projected average revenue growth rates of 10.4 percent.
The surveys are being presented today at the Council of Supply Chain Management Professionals (CSCMP) Annual Global Conference by surveys author, Dr. Robert Lieb, Professor of Supply Chain Management at Northeastern University’s D’Amore-McKim School of Business, and Joe Carlier, Senior Vice President of Sales for Penske Logistics.
The findings analyze responses from 27 major third-party logistics company CEOs across North America, Europe and Asia-Pacific whose companies generated approximately $46 billion in revenue in 2013. The report was co-authored with Dr. Kristin Lieb, Associate Professor of Marketing Communications, Emerson College. The survey is underwritten by Penske Logistics.
An encapsulation of key survey findings are as follows.
3PL Revenue Growth Projections
Nearly three quarters of these companies either met or exceeded their regional revenue projections in 2013. That represented a major improvement over their performance in 2012.
Near-Shoring Trend Continues
In the North American region, the survey revealed that near-shoring activities — e.g., customers shifting manufacturing activities from China to Mexico — is growing, with over 75 percent of North American CEOs reporting that some of their customers have shifted some of their operations from China to Mexico. This is impacting the revenue streams of 3PLs with nearly one-third of North American respondents reporting increased volume and revenues as a result of near-shoring. Rising Chinese wages, the benefits of a shorter supply chain from Mexico to the U.S., and increasing transportation costs have driven this near-shoring trend. In addition, several CEOs also remarked that Mexican government incentives have contributed to the movement.
“Near-shoring manufacturing operations to Mexico are often mirrored by an increased 3PL presence,” stated Carlier. “Penske Logistics, which has operated in Mexico for nearly 20 years, employs more than 1,300 associates in the country. Companies will look to 3PLs to optimize their services from warehousing to cross-border shipping in Mexico; those that have in-market experience navigating the nuances and complexities of the region will reap the most benefits.”
E-Commerce Growth
CEOs in all three regions noted not only the substantial growth in e-commerce over the past year, but also the long-term growth potential of that marketplace and the opportunities that growth might provide 3PLs. Nearly all of the 3PLs already support some e-commerce customers with services ranging from warehousing through fulfillment and reverse logistics.
“The 3PL industry has real opportunities to participate in the growth of both B2B and B2C commerce,” said Dr. Robert Lieb.
“However, to do so on a much larger scale will involve substantial investments on behalf of those companies. The e-commerce marketplace is very competitive and companies such as Amazon have also moved aggressively in providing logistics services for companies selling their products online. There is also an element of risk in that marketplace due to the prevalence of small online retailers and their financial vulnerability.”
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