Armstrong & Associates

Technological solutions and platforms are being rapidly developed and are catapulting the freight forwarding industry into a new era. Today, the forwarding industry is undergoing a digital revolution, and analysts surmise that companies that fail to keep pace with these advancements risk falling behind—and fast.

Themes focused on over the course of this podcast included: the state of the market; ways in which the pandemic affected 3PL operations; M&A; how 3PLs are adjusting to and leveraging nearshoring; and the economy, among other topics. 

In this podcast, Jeff Berman, Group News Editor for Logistics Management and the Peerless Media Supply Chain Group interviews Evan Armstrong, President of Brookfield, Wisc.-based supply chain consultancy Armstrong & Associates.

Following a previous announcement that Greenwich, Conn.-based global contract logistics services provider GXO Logistics made a $965 million cash offer to acquire Chippenham, UK-based Wincanton, a supply chain solutions services provider across myriad vertical markets, it appears that Wincanton is receptive to the offer.

Total estimated 2023 global 3PL market revenue was off 18.5% annually, coming in at $1.2 trillion. But even with that decline, the firm observed that this tally still represented a 25.3% increase, when compared to pre-pandemic 2019.

We canvassed a seasoned group of industry observers to record what happened this past year and what it means to our logistics and supply chain operations as we head into 2024. Here’s what they had to say.

With excess capacity and lower rates, the digital freight matching (DFM) market is keeping its eye on the ball as the segment ramps up to leverage AI to gain visibility and improve real-time monitoring capabilities.

A continued shift to remote work; the need for retailers to offer nimble shipping options; and the importance of warehouse operations to reduce inventory while increasing throughput are factors pushing laser-focused 3PLs to invest heavily in automation to make it all happen.

The freight forwarding market continues to be negatively affected by the ripple effects of normalization in consumer behavior, as well as the global economic and manufacturing slowdown. Consequently, volumes handled by freight forwarders slowed down in the second half of 2022.

Armstrong data points to a 24% annual increase to $148.1 billion, with overall gross revenues seeing an 18.3% annual increase, with total U.S. 3PL Market revenue coming in at $405.5 billion, for 2022.

DSV said that the objective of these acquisitions are three-fold: to augment its position within the semiconductor industry; align with its new Phoenix-Mesa Gateway Airport operations; and support its growing cross-border services into Latin America. It added that these acquisitions are expected to be made official next month.

A recently-released report by Brookfield, Wisc.-based supply chain consultancy Armstrong & Associates highlights the pandemic-driven swings the pandemic has had on the third-party logistics (3PL) sector, from various perspectives, including revenue, costs, and services, among others. Entitled, “Downshift: Latest Global and Regional Logistics Costs and Third-Party Logistics Market Trends and Outlook,” the report is replete with 3PL market data and analysis, taking a look at the recent past and what may be in store, in the coming years, too.

The report, entitled “Making it Count”: Big and Bulky Last-Mile Delivery in the United States,” is the result of a partnership between Armstrong and the National Home Delivery Association (NHDA) and focuses on various trends and themes, including: the usage of independent contractors compared to employee drivers; customer and revenue trends by vertical industry; and the growing use of freight brokerage to source last-mile carrier capacity.

As the need to secure capacity quickly and efficiently grows, DFM continues to build market share and investor interest—and put increased pressure on traditional brokers.

The trio of strong consumer demand, ongoing supply chain bottlenecks, and tight carrier capacity worked in tandem to drive air, ground, and ocean transportation rates to all-time highs in 2021, with shippers turning to third-party logistics (3PL) services providers on various fronts, including inventory replenishment and avoiding stock outs, according to a new report recently issued by Milwaukee-based supply chain consultancy Armstrong & Associates.