Current State ofThird-Party Logistics   Phone: +1-608-873-8929 Website: www.3PLogistics.com
About Armstrong & Associates, Inc.   Founded in 1980   Supply Chain Market Research and Consulting Services   Current R...
http://www.3plogistics.com/Site_Visits.htm                    3              ©Copyright 2010 Armstrong & Associates, Inc.
Value-Added Services & Capabilities                                           Domestic and Int’l Transportation Management...
Drivers of Global 3PL Market Growth    Low-Cost                    Regulatory                    Off-Shoring & Country Sou...
Changes in U.S. Truck TonnageSource: American Trucking Associations                                         6            ©...
Freight Forwarders Volume 2008 – 2010ESource: Company data, Morgan Stanley Research                                       ...
Freight Forwarders Volume 2008 – 2010ESource: Company data, Morgan Stanley Research                                       ...
2009 Global Logistics Costs & 3PL Revenue        Global 3PL Market = US$ 507 Billion                         9            ...
Top Global Fortune 500 Buyers of 3PL Services                37                             42     49                     ...
Trends in 3PL/Customer Relationships % of Domestic Fortune 500 Companies using 3PLs                       11              ...
Global 3PL Revenues by Select Vertical Industries                        12           ©Copyright 2010 Armstrong & Associat...
Tier 1 3PLs                 Global Supply Chain Managers            DHL Logistics UPS SCS Kuehne + Nagel      FedEx SCS/TN...
U.S. 3PL Market 1996 – 2010E                (US$ Billions)1996 – 2009 CAGR = 10.1%                                        ...
2009 U.S. 3PL Segment Revenues                 Gross Revenue     3PL             (Turnover)     % Decline     Net Revenue ...
2010 U.S. 3PL Gross Revenue Growth Estimates     ¹ Total 2010E gross revenue (turnover) for the 3PL market in the U.S. is ...
U.S. 3PL Segment Net Revenue Trends (US$ Millions)      3PL       % Decline       CAGR        % Change    Segment   2009 v...
U.S. 3PL Segment Net Income Margins                 18          ©Copyright 2010 Armstrong & Associates, Inc.
2009 vs. 2008 U.S. 3PL Market Momentum                  12           ©Copyright 2010 Armstrong & Associates, Inc.
Top 25 North American Warehousing 3PLs                                     Total Square FeetThird-Party Logistics Provider...
Top 25 North American Warehousing 3PLs (Continued)                                       Total Square Feet  Third-Party Lo...
3PL Information Technology Trends   I.T. is a top reason for companies outsourcing logistics.       Solid I.T. is critic...
Thank You!Milwaukee Wisconsin Office     Stoughton Wisconsin Office      Evan Armstrong                Richard ArmstrongAr...
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Evan Armstrong from Armstrong & Associates on ‘Examining the State of Third Party Logistics - Current Financial Results and Rays of Hope’

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Evan Armstrong from Armstrong & Associates on ‘Examining the State of Third Party Logistics - Current Financial Results and Rays of Hope’

  1. 1. Current State ofThird-Party Logistics Phone: +1-608-873-8929 Website: www.3PLogistics.com
  2. 2. About Armstrong & Associates, Inc. Founded in 1980 Supply Chain Market Research and Consulting Services Current Research:  Whos Who Logistics and Supply Chain Management – Americas  Whos Who in Logistics and Supply Chain Management – International  Warehousing in North America – 2009 Market Size, Major 3PLs, Benchmarking Costs, Prices and Practices  Targeted in-depth market research papers Articles & Press Coverage: American Shipper, Global Logistics & Supply Chain Strategies, Journal of Commerce, Logistics Management, Logistics Quarterly, Modern Materials Handling, Traffic World, Transport Topics, Wall Street Journal Consulting Services: Logistics Outsourcing, 3PL Strategic Planning, Mergers & Acquisitions, Benchmarking, Expert Witness, 3PL Capabilities Audits, Targeted Research Global Resources: U.S. Organization; Eric Xiang, Shanghai China; Latin America, Japan and South Korea Alliance Partners ©Copyright 2010 Armstrong & Associates, Inc.
  3. 3. http://www.3plogistics.com/Site_Visits.htm 3 ©Copyright 2010 Armstrong & Associates, Inc.
  4. 4. Value-Added Services & Capabilities Domestic and Int’l Transportation Management Cargo Insurance Carrier Contracting/Brokering/Freight Payment Both – 3PL/4PL Customs Brokerage/ACE/C-TPAT/FAST 4PL/Lead Logistics Provider Duty Drawback Processing Call Centers Incoterms Management – EXW to DDP Consolidation/Deconsolidation Letters of Credit/Negotiable BOLs Consulting/Process Reengineering Merge-In Transit EDI Handling NVOCC Financial Services Project Logistics Food Grade/Temperature Controlled Project Management Hazmat Skills Transportation Execution Purchase Order Management Transportation Network Planning/Optimization Internet Supply Chain Visibility Inventory/Vendor Management Warehousing/Cross-docking ISO Certification Bonded Warehouses Pool Distribution/Cross-docking Home Delivery Radio Frequency/RFID Installation/Removal Security Processes JIT/Kanban Sourcing Skills Kitting/Pick & Pack Light Manufacturing/Assembly Reverse Logistics Small Package/Fulfillment Easily Deployable WMSTier 1 GSCM’s provide these services and capabilities in global markets. 4 ©Copyright 2010 Armstrong & Associates, Inc.
  5. 5. Drivers of Global 3PL Market Growth Low-Cost Regulatory Off-Shoring & Country Sourcing Compliance Outsourced Mfg. Cost Focus on CoreReductions Competencies Operational Expanding IT Efficiencies Requirements Need Regional & Local Market Expertise 3PLs provide the infrastructure necessary to support increasingly complex supply chains involved in global trade. 5 ©Copyright 2010 Armstrong & Associates, Inc.
  6. 6. Changes in U.S. Truck TonnageSource: American Trucking Associations 6 ©Copyright 2010 Armstrong & Associates, Inc.
  7. 7. Freight Forwarders Volume 2008 – 2010ESource: Company data, Morgan Stanley Research 7 ©Copyright 2010 Armstrong & Associates, Inc.
  8. 8. Freight Forwarders Volume 2008 – 2010ESource: Company data, Morgan Stanley Research 8 ©Copyright 2010 Armstrong & Associates, Inc.
  9. 9. 2009 Global Logistics Costs & 3PL Revenue Global 3PL Market = US$ 507 Billion 9 ©Copyright 2010 Armstrong & Associates, Inc.
  10. 10. Top Global Fortune 500 Buyers of 3PL Services 37 42 49 37 30 32 31 2929 27 26 23 23 10 ©Copyright 2010 Armstrong & Associates, Inc.
  11. 11. Trends in 3PL/Customer Relationships % of Domestic Fortune 500 Companies using 3PLs 11 ©Copyright 2010 Armstrong & Associates, Inc.
  12. 12. Global 3PL Revenues by Select Vertical Industries 12 ©Copyright 2010 Armstrong & Associates, Inc.
  13. 13. Tier 1 3PLs Global Supply Chain Managers DHL Logistics UPS SCS Kuehne + Nagel FedEx SCS/TN CEVA Logistics DB Schenker CAT Logistics FreightMajor Markets ForwardersC.H. Robinson Panalpina Expeditors APL Logistics Penske NYK Logistics Ryder Nippon Express Geodis UTi Worldwide Agility Kintetsu World Exp Menlo Hellmann Worldwide DSV 13 ©Copyright 2010 Armstrong & Associates, Inc.
  14. 14. U.S. 3PL Market 1996 – 2010E (US$ Billions)1996 – 2009 CAGR = 10.1% -16% 14 ©Copyright 2010 Armstrong & Associates, Inc.
  15. 15. 2009 U.S. 3PL Segment Revenues Gross Revenue  3PL   (Turnover)  % Decline  Net Revenue  % Decline   Segment  (US$ Billions)  2009 vs. 2008  (US$ Billions) 2009 vs. 2008DTM 31.8 ‐15.1 5.2 ‐11.4ITM 35.1 ‐23.7 14.6 ‐18.9DCC 9.4 ‐16.0 9.2 ‐15.9VAWD 27.8 ‐5.3 21.9 ‐6.9 Total* 104.1 ‐16.0 50.9 ‐12.7* Total 2009 gross revenue (turnover) for the 3PL market in the U.S. is estimated at $107.1 billion. $3 billion is included for the contract logistics software segment.  15 ©Copyright 2010 Armstrong & Associates, Inc.
  16. 16. 2010 U.S. 3PL Gross Revenue Growth Estimates ¹ Total 2010E gross revenue (turnover) for the 3PL market in the U.S. is  estimated at $121.4 billion. $3 billion is included for the contract  logistics software segment.  16 ©Copyright 2010 Armstrong & Associates, Inc.
  17. 17. U.S. 3PL Segment Net Revenue Trends (US$ Millions) 3PL % Decline CAGR % Change Segment 2009 vs. 2008 1995–2009 2010E vs. 2009 DTM -11.4% 11.9% 8.0% ITM -18.9% 15.7% 12.0% DCC -15.9% 7.3% 6.0% VAWD -6.9% 14.9% 7.0% Total -12.7% 12.7% 8.3% 17 ©Copyright 2010 Armstrong & Associates, Inc.
  18. 18. U.S. 3PL Segment Net Income Margins 18 ©Copyright 2010 Armstrong & Associates, Inc.
  19. 19. 2009 vs. 2008 U.S. 3PL Market Momentum 12 ©Copyright 2010 Armstrong & Associates, Inc.
  20. 20. Top 25 North American Warehousing 3PLs Total Square FeetThird-Party Logistics Provider (3PL) (Millions) Number of FacilitiesDHL Supply Chain/Exel 99 511GENCO Supply Chain Solutions 37 123Jacobson Companies 35 145CEVA Logistics (The Americas) 33 164Caterpillar Logistics Services 29 130OHL 28.3 120Americold Logistics 27 104APL Logistics 26.1 166Kenco Logistic Services 25 100UTi Worldwide 24.3 234VersaCold Logistics Services 23 126MBX Logistics 20 51UPS Supply Chain Solutions 20 100Menlo Worldwide Logistics 18 120NFI 18 51DSC Logistics 15 37Ryder System 15 252Saddle Creek 15 52 20 ©Copyright 2010 Armstrong & Associates, Inc.
  21. 21. Top 25 North American Warehousing 3PLs (Continued) Total Square Feet Third-Party Logistics Provider (3PL) (Millions) Number of Facilities Warehouse Specialists 14 45 Penske Logistics 12.3 101 DB Schenker Americas 12 80 Schneider Logistics 12 33 Syncreon 12 70 Total Logistic Control 9.1 29 Kane Is Able 8.5 17 21 ©Copyright 2010 Armstrong & Associates, Inc.
  22. 22. 3PL Information Technology Trends I.T. is a top reason for companies outsourcing logistics.  Solid I.T. is critical to remain competitive and strengthen a 3PLs brand. 3PLs are striving for an integrated “base” systems backbone.  Menlo: TTMS, Infor/CAPS, Proprietary LMS, WMS (Provia modified), Menlo VIEW (Viewlocity)  Penske: i2 Technologies, Infor/EXE, Proprietary LMS, RT Systems, MARC  C.H. Robinson: Proprietary ExpressTMS, HighJump 22 ©Copyright 2010 Armstrong & Associates, Inc.
  23. 23. Thank You!Milwaukee Wisconsin Office Stoughton Wisconsin Office Evan Armstrong Richard ArmstrongArmstrong & Associates, Inc. Armstrong & Associates, Inc.10401 West Lincoln Avenue 100 Business Park Circle Suite 207 Suite 202 West Allis, WI 53227 USA Stoughton, WI 53589 USA 414-545-3838 608-873-8929

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