Power 25: Stability at the top, churn at the bottom

Slower, but no signs of stopping

While 2017 was a remarkable year that lifted many 3PLs out of trouble, few expect it will be repeated in 2018 and beyond, but most said they felt confident growth would continue, albeit at a slower rate. “The start of 2018 has continued the trends we experienced last year,” said Crane’s Sam Slater. “The overall market remains strong, our airline partners continue to see record growth and we are also very appreciative of the support they provide in facilitating our growth.”

In Armstrong & Associates’ recently published “E-commerce Logistics Report,” estimating growth from 2017 through 2020, revenues from 3PLs were expected to rise from $49.5 billion globally in 2017 to $76.2 billion by 2020, or 15.5 percent annual growth. “We’re seeing about 18 percent e-commerce-related growth in the United States, and about 16 percent in the Asia-Pacific region,” Armstrong said. “When you get to the Asia-Pacific side you still have pretty good cross-border trade, especially on the e-commerce side.”

Agility’s Blaufuss said the Kuwait-based 3PL expects growth to continue in 2018 and 2019. “Digitization and automation of our processes are a big element” of Agility’s strategy. “At the same time, we also believe we will be adding volume and revenue through the introduction of Shipa Freight, a new online self-service option aimed at small and medium-size companies that have traditionally been underserved by freight forwarders.”

Hong Kong’s Kerry Express (No. 20), which has 600 distribution centers and 2,500 service centers throughout Thailand, plans to provide logistics services this year for VGI Global Media (VGI), the multimedia subsidiary of Bangkok’s mass transit system, as the city increases its effort to expand its online-to-offline infrastructure. “Kerry tends to achieve growth from a mix of acquisitions and organic growth,” Armstrong said, but he added that much the company’s growth may be in Europe and the U.S.

Many of the larger 3PLs that do perishable business in Latin America, such as Panalpina, can also expect to benefit from a resurgence in the Brazilian economy. Armstrong & Associates said this activity in the market will like lead to 5 to 6 percent growth in 3PL tonnage for fiscal year 2018.

“Of course a trade war can put it all to rest, right?” Armstrong pointed out, noting the increasingly urgent rhetoric from the Trump administration regarding tariffs. “Anything we can do on the trade side is a bit more of stretch now than it was a couple of years ago.”

But, ending on a positive note for the industry, Armstrong added: “The more complex things get, they more shippers rely on third-party logistics.”

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