Monday, May 5, 2008

Surprise, We are Making Money

Have you ever noticed how bad news gets a heck of a lot more press than good news? Even good news is often reported with a negative spin. Have you ever heard a report that 95% of American's are employed? I always hear 5% are unemployed. What's up with that? Staying positive helps me stay motivated to success. So I really liked this article sent to me by Greg Williams, Director, Financial Analysis and Business Development of http://www.blogger.com/img/gl.link.gif

3PLs Thrive Despite U.S. Ills

Despite the ongoing freight recession in the United States, revenues of U.S. third-party logistics service providers grew to $122 billion in 2007, according to a report by Armstrong & Associates.

Gross revenue grew by 7.4 percent while net revenue grew 7.2 percent, the report found.

Global revenues grew to $487 billion, driven by expanding growth in Asia. Revenue growth was highest in non-asset transportation management. Overall growth continued a pattern of being more than three times the growth of the U.S. Gross Domestic Product.

The supply chain market research and consulting firm specializing in 3PLs said growth continues to be driven by companies outsourcing to concentrate on core competences, the need for sophisticated supply chain information technology solutions, and globalization.

The report, "U.S. and Global 3PL Financial and Acquisition Results and Projection to 2010", predicts that U.S. 3PL revenues will exceed $150 billion in 2010 after modest growth of 5.5 percent in 2008 and 7.5 percent in 2009.

International transportation management including Expeditors International, Kuehne & Nagel and DHL Global Forwarding grew by 9.5 percent.

Domestic transportation management grew 8 percent with net income margins averaging 13.4 percent. This includes freight brokerage and related value-added services. C.H. Robinson dominates domestic transportation management with 34 percent of net revenues and 66 percent of pre-tax earnings.

Third-party logistics continued to consolidate in 2007. Strategic purchases and private equity investments continued across functionalities. Wall Street analysts became concerned about the inherently lower profit margins in value-added warehousing and distribution. In addition, investors continued their preferences for non-asset based activities.

So go out and get your piece of that pie.

Moving forward,

Jeff Roach

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