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The business of classifying third-party logistics providers (3PLs) gets harder each year. For example, Ryder, a dominant dedicated contract carrier since 1980, is now in warehousing and distribution and is a major transportation manager. All of those activities make it the fifth-largest 3PL based in North America. And, of course, the story doesn't end there.
Take C.H. Robinson Worldwide. It has moved significantly into international transportation management with its purchase of Phoenix International. Then there's GENCO. Its CEO, Herb Shear, has steered the company to become the 8th-largest North American-based third-party logistics services provider in net revenue. Genco is now a major player in value-added warehousing and returns.
The number of new entrants to the 3PL ranks has not made playing the classification game any easier. Some of the new (or relatively new) names include Neovia, ModusLink, Fidelitone and 3PD. Neovia was born from the former Caterpillar Logistics Services, but it now stands alone. ModusLink is a new 3PL that is heavily involved in computers, electronics and retail. Fidelitone specializes in consumer high-tech. 3PD is heavily involved in last-mile logistics services.
Other names, such as NFI and Kenco Logistics Services, aren't new. But they too have spread out significantly from their warehousing roots. High-tech customers and utilization, in particular, are driving changes.
Classifying winning third-party logistics markets is a bit easier than assessing the individual company players. Fiscal year 2012 saw single-digit increases in revenue in most places, and it's not hard to see where the activity is most lucrative.
While we do not have the final numbers for 2012, Armstrong & Associates expects to see U.S. 3PL gross revenues to be about $142bn. Our forecast for 2013 calls for continued growth - to $151bn or so.
We divide these revenues into four functional areas: value-added warehousing and distribution (VAWD), dedicated contract carriage (DCC), domestic transportation management (DTM) and international transportation management (ITM). Larger companies, such as DHL/Exel and DB Schenker, have significant revenues in all the functional areas. But the DTM arena is the only double-digit gainer. 3PLs focusing on domestic transportation management continue to broker and manage more truckload (15 percent to 20 percent) and less-than-truckload shipments each year. Dividing the revenues up by function for Menlo Worldwide Logistics or Jacobson Companies gets more challenging each year.
Merger and acquisition activity driven by private equity investors is heaviest in domestic and international transportation management. Even smaller DTM and ITM 3PLs are being called regularly by investors. Slack economic conditions over the last couple years have increased interest.
Globally, 3PL revenues in 2012 were reflective of regional economic malaise. Again, final figures are not in, but our initial estimates suggest that European 3PL revenues shrank last year by 1.2 percent. Unfortunately, this is not a new development for Europe. In this report last year for SupplyChainBrain we predicted a bleak year for European 3PL markets and players in the industry.
By contrast, all other regions saw gains in 2012. Take a look at American revenues; they rose 7 percent. Business was even better in most other parts of the world. For instance, Asia Pacific revenues expanded a full 9 percent, and Central and South American revenues topped that, hitting 9.5 percent. All other regions of the world can boast as well, having increased 6.5 percent.
Predictions are difficult to make, but at this point it appears that the second half of 2013 may see even more of an uptick in economic activity. Certainly, China, Southeast Asia and the United States should see expansions. The picture for Europe is not so bright. If anything, it looks like it will have another long year.
As far as Latin America goes, Brazil is looking for the right formula and could see some impressive numbers this year. But it's Mexico that we see continuing as the region's star.
In the following section, we provide compact descriptions of 50 North-American-based 3PLs or in some cases, the Americas operations of some providers headquartered outside of North America.
Notice I didn't say "the Top 50" North-American-based 3PLs, and for good reason. The list that follows is not a ranking. That kind of labeling usually suggests one company is "better" than its competitor. In fact, they may be superior in one area or another. But that's just the point of this list of 50 providers: not to say one is superior to another but to highlight their strengths and the industries and areas that they focus on.
Most of these names need no introduction, and some of them belong to huge operations. They clearly are global in the scope of their operations and customer base. Other names belong to companies that used to be solely regional operators or to some that continue to focus mainly on North American markets but which easily girdle the globe with their service offerings. It's safe to say that they have Class-A, international operations.
It's also clear to us that whatever you need in logistics services - and wherever you need it - these 50 3PLs are there for you. - Richard Armstrong, CEO of Armstrong & Associates
2012 Global Logistics Costs and Third-Party Logistics Revenue Estimates
50 North-American-based 3PLs
Offering top-notch services when you need them, anywhere in the world
Exel (DHL Supply Chain - Americas)
Exel (DHL Supply Chain - Americas) is by far the largest contract logistics operation in the Americas. (Exel and its sister companies, DHL Supply Chain and DHL Global Forwarding, constitute the world's largest 3PL.) Exel has 42,100 employees, 456 warehouses and 111 million square feet of space throughout the Americas region. The U.S. generates 65 percent of revenue, Brazil 10 percent, Canada 7 percent, Mexico, 5 percent and other Latin American countries account for the rest. Its largest business units are Consumer/Life Sciences and Retail, which account for 31 percent and 26 percent of revenue, respectively. Exel/DSC has operations of virtually every kind. A major initiative over the last few years involves expansion into contract manufacturing and packaging.
UPS Supply Chain Solutions
UPS is the 800-pound gorilla of global supply chain services. UPS SCS had a profitable year in 2011. UPS SCS contributes $2bn+ per year in package business to its big brother. UPS handles about 500,000 TEUs per year as a freight forwarder. Twelve percent of containers are LCL consolidations; 40 percent are Asia-U.S. Forwarding revenues are 60 percent air and 40 percent ocean. UPS has 1,400 employees involved in customs brokerage: 400 in Aiken, S.C., 250 in Cleveland, and 750 in Louisville, Ky.
The UPS DCC business was built from the purchases of Rollins and Overnite. More than 95 percent of its power units are assigned to specific customers. Average length of trip is about 400 miles. Customer operations range from 10 to 100 trucks. UPS has redesigned its supply chain operations to concentrate on high-tech, medical and some retail/consumer goods customers. These operations are highly integrated between value-added and package delivery services.
Expeditors International of Washington
Expeditors is the largest North-American-based freight forwarder. Net revenues have reached $1.9bn and produce a gross margin of 31 percent. 2009 was a difficult year, but revenues came back in 2010-11, exceeding 2008 levels. Net revenues are 37 percent airfreight, 40 percent customs brokerage and 23 percent ocean freight. U.S. and Asia business account for 80 percent of revenues.
Expeditors is the largest forwarder/NVOCC in the Asia/U.S. lane. It handles over 890,000 TEUs per year globally. Nearly 50 percent are shipped from Asia to the U.S. Expeditors' European operations are primarily in airfreight and constitute about 13 percent of revenues. Expeditors' net revenues run 40 percent high-tech, 33 percent retail, 10 percent pharmaceuticals, 10 percent automotive, 5 percent furniture and 2 percent other. Expeditors limits its participation in value-added warehousing and distribution.
CEVA Logistics (Americas)
Ceva Logistics is one of the world's largest logistics companies and has been the world's largest automotive 3PL. It has a heavy emphasis on manufacturing and is expanding operations in other sectors. CEVA's industry sectors are Automotive 28 percent, Consumer/Retail 23 percent, Technology 22 percent, Industrial 16 percent, Energy 6 percent and Other 5 percent. CEVA operates in over 170 countries.
The CEVA operations we have visited get top marks. CEVA is very good at value-added support activities. Its Matrix software suite reflects its range of logistics capabilities, including materials management. CEVA's core services include fulfillment centers, high-velocity cross-docks, sub-assembly, sequencing, dedicated contract transportation, and network designs/redesigns. Its revenue is split between Contract Logistics (54 percent) and Freight Management (46 percent). The Americas account for 30 percent of its revenues, Asia Pacific 28 percent, Northern Europe 24 percent and Southern Europe, Middle East and Africa account for the rest. Private equity owner Apollo Management acquired EGL Eagle Global Logistics which was rebranded as CEVA Freight Management in 2007. EGL added global freight forwarding to match CEVA's high-quality, value-added warehousing, materials management and other contract logistics capabilities. In 2008, CEVA introduced its Century Partnership Account Program for 100 of its key customers selected by its Executive Board. These accounts have a global scope and represent more than half of CEVA's total business. Fiat, CEVA's largest customer, began moving many of its operations outsourced to CEVA back in house in the spring of 2011. Apollo has restructured CEVA's debt burden to give it some breathing room.
Ryder Supply Chain Solutions
Ryder, one of the most recognizable 3PL brand names, is a Big-5 logistics 3PL. Ryder is a lead logistics provider for most GM plants and services Chrysler/Fiat, Toyota and Honda plus a multitude of tier-one suppliers. Ryder runs top-notch inbound supply chain management, sequencing centers, just-in-time and dedicated contract carriage operations. Ryder and Leaseway (Penske) started DCC from single-source truck leasing in the late 1970s. For its key customers, it provides 200 to 350 tractors each. Its revenue target without the fuel surcharge is $150,000 a year. Ryder DCC has 150 on-site managers, 400 locations and 250 accounts. Ryder's transportation management center assists with balancing lanes. Equipment is specifically assigned to 85 percent of accounts. A large part of trailers are specialized equipment. Ryder runs more straight trucks than any other DCC. About 50 percent of its trips are greater than 500 miles. Around 200 to 300 owner-operators are used primarily for home delivery, newspaper accounts and some long haul business. John Williford, chief executive officer, Tom Jones, senior vice president and chief of the automotive logistics operations, and Stephen Dean, executive vice president, have redesigned Ryder's SCS emphasis. Their redesign is based on an expansion of Asia-U.S. retail business leveraging off of the purchase of Transpacific Container Terminals and CRSA and a joint partnership with Hong Kong-based Cargo Services Far East. Ryder's SCS business was about 60 percent automotive through 2008. In 2010, automotive was about 45 percent of the business, high-tech was 22 percent, retail/consumer packaged goods was about 18 percent and industrial/other 15 percent. Williford's team has been working hard on the further expansion of retail, consumer goods, and high-tech business. Operations in South America were eliminated so that Ryder's resources can be applied more strategically. Mexican operations are very good with revenues at $210m a year. In December 2010, Ryder acquired Total Logistic Control, a leading 3PL in providing value-added warehousing and transportation management services to customers in the food and grocery and retailing vertical industries. In January 2011, Ryder acquired two Southern California dedicated operations to expand its presence in dedicated contract carriage in the West, as well as increase its customer base in the retail vertical industry.
UTi's net revenues increased nearly 10 percent last year. UTi's contract logistics and distribution operations are 54 percent of net revenues. UTi has strong forwarding operations in Asia with an emphasis on airfreight and a major pharmaceutical distribution operation in South Africa. It is expanding its contract logistics operations in Asia, particularly in India, which it has designated for major market expansion. UTi's roots are in South Africa and it does very well in British Commonwealth countries. It has a major North American effort under way to expand its domestic transportation management operations.
C.H. Robinson Worldwide
C.H. Robinson continues to be the most profitable tier-one 3PL, regularly achieving net income margins greater than 20 percent. C.H. Robinson dominates domestic transportation management in North America. While 76 percent of Robinson's net revenues are truck-transportation-related, it has solid domestic intermodal, international air and ocean, food sourcing and supply chain management operations. C.H. Robinson's purchase of Phoenix International will double its ocean freight operations to 500,000+ TEUs. It has also been expanding its TMC operations which focus on large transportation network management. The TMC is now serving the Americas, Europe and Asia. Employees are highly incented to take care of customers. C.H. Robinson's Canadian operations developed quickly and it has become a strong player with eight offices for freight brokerage, six for forwarding and three for produce. European operations have also been successful, profitable and expanding in Poland and the Eastern Bloc. They are a natural fit for Europe's atomized owner-operator based companies. Asian operations continue to grow. Robinson acquired offices in India and continues to make careful purchases of companies with specializations. It has the cash flow to make more. C.H. Robinson's IT and business processes are tightly coordinated. Reporting capabilities provide good operating and profitability control. Ongoing modifications include much stronger and friendlier carrier/capacity management.
GENCO is one of the largest value-added 3PLs in North America. It has a series of niche solutions heavily integrated with specialized IT applications. Basic services are contract logistics; reverse logistics; product liquidation (GENCO Marketplace); pharmaceutical services; damage research; transportation logistics, including a large parcel negotiation/audit operation; and government logistics and operations support. GENCO dominates the reverse logistics area, which provides about 40 percent of revenue. There is a heavy emphasis on integrating Six Sigma/Lean Logistics and sustainability initiatives. IT applications include the leading return logistics software program R-Log, voice tasking, RFID, robotics, optical real-time location system, pick/put-to-light, and hydrogen fuel-cell-powered forklifts all supported by a R&D technology learning center. GENCO is a technological generation ahead of most value-added warehousing and distribution 3PLs. GENCO has a host of "A" level operations in all its value-added specializations. GENCO's acquisition of ATC strengthened its dominance in reverse logistics. ATC has been one of the best quality and most profitable value-added warehousing and distribution 3PLs. In EMEA, GENCO has operations in Kuwait and the UK and generates about $11m in gross revenue annually.
DB Schenker Logistics (Americas)
DB Schenker made significant purchases from 2006 to 2008 to double the size of its operations. The purchases include BAX in 2006, Spain-Tir in 2007 and Romtrans in 2008. Romtrans was the largest forwarding company in Romania with $140m in revenue and 1,500 employees. Operations go as far east as Georgia. Spain-Tir had over 700 trucks and 16 million square feet of warehousing space covering the Iberian Peninsula. BAX added significant North American and Asian capacity. German operations, including Europe's largest rail freight and trucking operations, are over 70 percent of total revenues. DB Schenker's European trucking by land transport has over 24,000 employees/owner-operators and handled 96 million shipments in 2011. Russian and Eastern European operations are substantial. DB Schenker is significantly expanding its contract logistics operations adding over $100m of new business in 2012. Dave Bouchard leads the Americas effort. Detlef Trefzger heads global contract logistics and is spearheading the expansion. North American contract logistics operations are 42 percent consumer goods, 30 percent high-tech, 16 percent industrial and 12 percent automotive.
Neovia Logistics Services
Neovia Logistics Services, formerly Caterpillar Logistics Services, has heavy U.S. and European operations with a growing presence in South America and Asia, distributing to more than 190 countries from over 100 facilities. Neovia Logistics' scope reflects Caterpillar's global reach and dealer network. Neovia Logistics' business is split equally between North America and the rest of the world. It continues to expand its automotive logistics business in Europe. In the U.S., the company has completely integrated warehousing and manufacturing supply chain services. Visibility in its integrated systems of SAP, i2 and GT Nexus is very good. Demand and supply forecasting and material planning capabilities are excellent. Forecasting for low turnover items is a controlled standard operating procedure. Neovia Logistics manages over $2.4bn in purchased transportation per year. Neovia Logistics focuses on customers with high-value durable goods. A major initiative involves logistics into and out of China. In May 2012, Caterpillar sold 65 percent of Cat Logistics to private equity firm Platinum Equity and rebranded it as Neovia Logistics Services LLC.
J.B. Hunt DCS & ICS
J.B. Hunt Dedicated Contract Services (DCS) has over 300 customers and is the largest dedicated contract carrier. It is the benchmark standard for DCC comparisons. Armstrong & Associates estimates that about half of J.B. Hunt's dedicated tractors are tandem axle sleepers. About as many are day cabs used in regional operations. Driver turnover rates are about half of regular over-the-road trucking operations. Revenues run $565 per load and most round trips average 300 miles. Average revenue per tractor per year runs $209,000. A significant part of Hunt's DCS operations involve direct store delivery. It uses its parent company and other facilities for last mile operations. It has 87 last mile support locations and has introduced a major home delivery initiative. Over 95 percent of Hunt's dedicated contract carriage power units are assigned to specific accounts. J.B. Hunt DCS continues to grow and has spread into integrated transportation management.
J.B. Hunt Integrated Capacity Solutions (ICS) generates about a quarter of the gross revenue shown and its gross margin runs 13.5 percent. ICS is primarily a transportation manager. Hunt is also one of the largest U.S. intermodal marketing companies. Intermodal is now 60 percent of its total business.
Kuehne + Nagel (Americas)
Kuehne + Nagel is one of the world's leading logistics companies providing services at more than 1,000 locations in more than 100 countries. It has strong market positions in the sea freight, airfreight, contract logistics and overland businesses, with a clear focus on providing IT-based integrated logistics solutions. With the addition of the ACR group, contract logistics operations more than doubled in 2006 and are 50 percent of net revenues. The industry breakdown for its contract logistics operations is: retail 35 percent, healthcare 22 percent, technological/telecom 18 percent, chemicals 7 percent, automotive 6 percent, fulfillment 5 percent, misc. 5 percent, and services 2 percent. Kuehne + Nagel's North American logistics network totals 12 million square feet of space across 50 DCs. There are 11 DCs in Canada (located in Toronto, Montreal, Calgary, and Edmonton), 30 single- and multi-client DCs in the U.S., six facilities in Mexico, and four Mexican border locations for transborder/customs services. Americas business for Kuehne + Nagel is 15 percent of net revenues. Net revenue was $994m in 2011 for the Americas with over 50 percent from freight forwarding. Kuehne + Nagel has developed its own land transport management and trucking network for Europe. In 2011, the globally operating Kuehne + Nagel maintained its growth momentum in a challenging market environment and achieved good results. Net earnings were slightly above the previous year and reached CHF 606m ($643m) - a new record high. In 2011 and 2012, Kuehne + Nagel has outpaced the volume growth of the market in all its fields of activity. Sea freight and airfreight business units again led the way. In both areas, high internal productivity and strict cost management compensated for the costs of investments made in technology and product development and strengthening of niche segments. Leveraging its forwarding and contract logistics capabilities, Kuehne + Nagel has built good global spare parts logistics and cold chain/pharmaceutical capabilities.
Swift signed (November 2011) an $80m, three-year pact with Wal-Mart to provide service from Wal-Mart DCs to stores in the southeastern United States. Part of the advantage it brought to the table was the ability to slip seat. Wal-Mart is Swift's largest dedicated contract carriage customer, accounting for 12 percent to 13 percent of revenue. Target is 8 percent of Swift's DCC business. Dollar General recognized Swift as DCC of the year in 2010. DCC operations are 40 percent reefer using a significant amount of customer trailers. Swift is expanding its use of owner-operators (now 15 percent of drivers). Ninety-five percent of its tractors are customer specific. Eighty percent of contracts are for three years. Average round trips are 450 miles. Like other large TL-based DCCs, most drivers are recruited from over-the-road operations. Swift's DCC overlaps more with its company's OTR operations than most other DCCs.
Werner Enterprises Dedicated & Logistics
Werner is a major dedicated contract carrier and U.S. trucking company with growing non-asset-based domestic and international transportation management operations. Werner Enterprises has invested significantly in its non-asset-based 3PL operations, Werner Global Logistics (WGL) and Value Added Services (VAS), to expand beyond its core North American trucking operations. Werner Global Logistics (WGL) is a licensed U.S. NVOCC, U.S. Customs Broker, TSA-approved Indirect Air Carrier, ITAR Certified Air Carrier and IATA Accredited Cargo Agent. Werner Global Logistics (Shanghai) Co. Ltd. is a licensed freight forwarder and NVOCC in China and a logistics, consulting, warehousing, consolidation and ground transport operator throughout China. Werner Global Logistics Mexico provides freight forwarding and NVOCC services to Werner Enterprises' customers in Mexico. VAS consists of Brokerage, Freight Management services and Intermodal. VAS and WGL have grown to over $450m in annual freight under management. When adjusted for accounting revenues, combined gross revenues for 2011 were $320m and accounted for 16 percent of Werner Enterprises' total revenues. Total operating income for the non-asset logistics services operations was $17m in 2011, which equated to 9.8 percent of Werner Enterprises' total operating income. Before 2009, Werner Enterprises' Dedicated services operations had grown at over 33 percent annually. With 2011 revenues of $767m, Dedicated services accounted for nearly 40 percent of Werner Enterprises' revenues and approximately 47 percent of its total truck fleet with 3,400 tractors. Dedicated services' largest customer is Dollar General. Other major Dedicated services accounts include: Anheuser-Busch, ConAgra Foods, Family Dollar, Home Depot, Kraft, OfficeMax, P&G, Sears, Staples and Wal-Mart (power only). Dedicated services manages over 120 individual customer fleets ranging from one to 100+ tractors. About 70 percent of the fleets are managed on-site at customer locations and about 30 percent of the smaller fleets are managed from Werner Enterprises' operations center in Omaha. Werner is a major U.S./Mexico carrier with more than 600 border crossings a day.
Founded in 1932, NFI offers a variety of integrated supply chain services. Its strongest operations are in the Northeast, California, Illinois, Ohio and Texas. The company is one of the largest privately held third-party logistics providers in North America. NFI's divisions include NFI Logistics, NFI Distribution, NFI Transportation, NFI Intermodal, NFI Real Estate, NFI Global, NFI Contract Packaging, and NFI Consulting. NFI relies on NFI Real Estate for new warehouse facilities and Distribution for established locations. NFI continues to integrate its divisions and move its asset-based transportation away from transaction business to dedicated carriage. NFI made a few acquisitions over the past year, including IPD Global (now NFI Canada), World Warehouse and Distribution and the West Coast operation of Maersk subsidiary The Gilbert Company. NFI is at its best in integrated operations involving dedicated contract carriage, transportation management and value-added warehousing and distribution. Trucking operations are all dedicated contract carriage. Sid Brown is a strong, hands-on CEO.
APL Logistics' strengths have been in the automotive/industrial and retail client verticals. It has also been expanding its consumer goods and high-tech business with accounts such as Colgate-Palmolive and Netgear. Forty percent of revenues are in the automotive/industrial segment, 33 percent retail, 10 percent consumer goods, 5 percent electronics/high-tech and 12 percent other. The Americas generate 63 percent of revenues, Asia/Middle East 25 percent and Europe 12 percent. APL Logistics has automotive joint ventures in China. About 63 percent of APL Logistics' revenues are from contract logistics. Consolidation, deconsolidation and freight forwarding make up the rest. Its global warehousing network consists of 99 facilities with 15.8 million square feet of space. Its forwarding operations are closely linked to its parent company's ocean container operations. APL Logistics provides customers more transparency than other Asia-based logistics companies. APL Logistics handles about 400,000 shipments in its intermodal division annually. Top intermodal customers include: 3M, Ace Hardware, Baxter, Bay Valley Foods, Del Monte, Hino Diesel Trucks (U.S.A.), IKEA, Wal-Mart, and Winn Dixie. APL Logistics purchased 1,000 new 53-foot APDU containers in 2011 to expand its intermodal capabilities. Sister company VASCOR is a major automotive 3PL.
Schneider Logistics & Dedicated
Schneider Logistics provides transportation management and port logistics (warehousing, transloading, distribution, drayage and transportation management). It has six port logistics operations, including Chicago, Los Angeles and Savannah (four buildings). Schneider's port logistics handles 200,000 containers a year. It also runs a Wal-Mart distribution center in Savannah. In addition, Schneider has eight regional cross-dock locations for distribution of domestic traffic. Schneider Logistics' freight under management runs $1.9bn a year. John Vesco is vice president and general manager of Schneider Logistics. Freight brokerage and its related transportation management are done by Schneider Transportation Management (STM). Erin Van Zeeland is senior vice president and general manager for STM. STM is part of Schneider National. STM's purchased transportation is $210m. There are 300 employees. Schneider Dedicated has dispatch offices at its Green Bay, Wis., headquarters. Operations are primarily vans with some refrigerated, flatbed and lightweight trailers. Schneider's pure dedicated contract carriage activities encompass 3,000+ tractors. Schneider's asset density and IT capabilities are leveraged to provide dedicated capacity for many customers rather than exclusive equipment dedication. To provide this capacity, parent Schneider National operates nearly 12,000 power units. Schneider National's revenues are over $3bn a year. Schneider is a privately-held, opaque company. Dan Van Alstine is senior vice president and general manager for Dedicated Services within Schneider National. Wal-Mart is Schneider Dedicated's largest customer.
Penske Logistics is a major automotive logistics player. It is Ford's lead logistics provider and provides significant services for General Motors, Daimler and tier-one suppliers. Penske is one of five major automotive 3PLs with over $200m per year in automotive revenues. It has made significant strides in leveraging its automotive experience to other verticals. Major wins include: Steelcase, PPG, Wawa, Mission Foods, Samsung, Sony, Merck, Eaton and Emerson. Penske Logistics is a master of inbound supply chain management, cross-docking, sequencing, just-in-time support and dedicated contract carriage. Penske's legacy in DCC goes back to Leaseway which was a major innovator in transportation and logistics. Leaseway was a founder of DCC in the late 1970s. Penske provides Cardinal Health with 700 tractors in DCC. For Wawa stores on the East Coast, it uses 38-foot trailers for deliveries to 575 stores. Penske logistics is divided into three regional groups. As a result, DCC, value-added warehousing and distribution, and transportation management are often overlapping and integrated. Tractors average about 80,000 miles a year because of length-of-haul and route structures. Mexican and Brazilian operations are particularly strong. European business continues to grow and gain in a much tougher market. Penske Logistics opened a Shanghai, China branch to broaden its global network. It has also expanded operations in India.
Meritor Logistics is the new 3PL unit of Meritor Inc., formerly ArvinMeritor Inc., a leading provider of drive-train mobility and braking solutions for original equipment manufacturers of trucks, trailers and specialty vehicles. Meritor Logistics specializes in motor vehicle aftermarket spare/service parts logistics.
In 2007, TDS merged with Walsh Western and rebranded as syncreon. In late 2009, syncreon acquired NAL Worldwide and subsequently integrated H3 Logistics in early 2010, further expanding its market reach. It provides fulfillment, distribution and reverse logistics services for all of the industries it serves. Additionally, syncreon provides market-centric services for each industry, such as parts metering/sequencing for automotive, e-fulfillment for technology and store reset logistics for retail.
During 2008, Ozburn-Hessey Logistics and all of its acquired companies rebranded as OHL. The branding project was undertaken to meld the multiple divisions, companies and brands that were parts of OH Logistics. Companies that had been acquired had specialized service offerings, management teams, customer relationships and were well-known within their geographies. However, none of the companies had an established international brand. OHL intends to establish itself as a strong international supply chain management solutions provider. It has an extensive global network and a broad range of services. The company provides logistics solutions for several large companies, including Arch Chemicals, Coca-Cola, Land O'Lakes, Red Bull, Samsung and Starbucks. OHL has over 32 million square feet of warehouse space, primarily in North America, and has greatly enhanced and expanded its domestic and international transportation offerings. Private equity investment firm Welsh, Carson, Anderson & Stowe has reconfigured top management over the last few years to reflect OHL's push to 3PL globalization. In October 2012, OHL sold off its Turbo Logistics freight brokerage to XPO Logistics.
New Breed Logistics
New Breed has solid operations within aerospace, healthcare, high-tech, government, retailing and telecommunications verticals. New Breed has expanded significantly over the last five years following an equity investment.
Menlo Worldwide Logistics
Menlo Worldwide Logistics is one of the leading U.S.-based 3PLs. It has adapted a Lean / Six Sigma management approach that generates positive results both on its profitability and in developing new business. Menlo has solid inbound supply chain management and finished goods distribution capabilities. It is a prime contractor for the U.S. Transportation Command's Defense Transportation Coordination Initiative and the lead logistics provider for truck manufacturer Navistar. Menlo is also a key 3PL for HP, Caterpillar, GM, Sears and Dow. Menlo has significantly grown its China and Southeast Asia network and is continuing to expand its European operations. Both are adding significant pieces of business with retailers such as Triumph in the U.K. and Malaysia and Puma in Singapore. In Southeast Asia, Menlo runs 27 value-added warehousing operations with 3.5 million square feet of space and a workforce of 1,175. Menlo's IT capabilities, including its recent addition of Oracle-TM's transportation management system, provide it with solid supply chain management and optimization capabilities.
Ruan has been a provider of dedicated contract carriage and transportation management services with good success in the upper Midwest and California. Ruan tends to be flexible and resourceful and reports from its customers indicate general satisfaction. Ruan handles a wide range of van and specialized commodities. It has extensive bulk operations in food and chemicals, flatbed steel delivery, as well as standard retail (Target) and food operations. All of its equipment is dedicated to specific accounts. It operates 1,596 tankers, 1,388 reefers, 528 flatbeds and 189 other specialized trailers plus 1,966 dry vans. Its 3,335 tractors are split almost equally between sleeper tandem axles and day cabs. About three-fourths of its contracts are for five years. A big part of its new business comes from specialized equipment private fleet conversions. Ruan is particularly successful using part-time drivers with extensive farming, construction and fire backgrounds. It is a Midwestern advantage.
Jacobson is a quality, modern, value-added 3PL with significant transportation management, warehousing, and packaging operations. Food and beverage is its largest industry segment by revenue at 38 percent, followed by chemicals and durables at 16 percent each, consumer packaged goods at 14 percent, industrial/agri at 10 percent, life sciences at 3 percent and electronics at 3 percent. Private-equity owner Oak Hill Capital has helped Jacobson in its recent recapitalizations and acquisitions, allowing it to expand significantly. Jacobson restructured its six integrated operating companies into three business units: Transportation Logistics Services (TLS), 24 percent of revenue; Contract Logistics Services (CLS), 72 percent of revenue; and International Logistics Services (ILS), 4 percent of revenue. Jacobson's 2011 acquisition of Chimerica Global Logistics Ltd. (CGL), a 3PL headquartered in Hong Kong with subsidiary operations in mainland China, provides it with a platform for further expanding its international freight forwarding operations and building a "beachhead" for growing its domestic warehousing operations in China. In the U.S., Jacobson is providing parts distribution and just-in-time services for John Deere. Philip Morris, Merial and BASF are also large customers.
Pilot Freight Services
Pilot Freight Services changed its name from Pilot Air Freight in 2007 to better reflect its expanding service capabilities. It has 75 locations throughout the U.S. and Canada, a location in Amsterdam and a network of agents worldwide.
Panalpina is a top 10 freight forwarder. It handles more than 1.3 million TEUs per year, more than 800,000 metric tons of airfreight and about 1 million tons of non-containerized break bulk cargo. It has 242 sub-contracted warehouses in 150 countries and is consistently profitable. The life blood of Panalpina is its ongoing financial stability and transparency. Its gross profit runs greater than 20 percent, EBITDAs (earnings before interest, tax, depreciation and amortization), EBITs and net incomes consistently run among the industry's best. Like all of the truly strong players, these results are clearly and straightforwardly reported for each financial period. Gross profit (net revenue) runs 46 percent for airfreight, 30 percent for ocean freight and 24 percent for logistics. Panalpina concentrates on nine verticals/segments: automotive, chemicals, consumer retail, fashion, healthcare, high-tech, manufacturing, oil & gas, and telecommunications. Telecom growth was major in 2007. Its oil & gas operations are primarily in project logistics, which accounts for 10 percent to 15 percent of Panalpina's revenues.
Ingram Micro Logistics
Ingram Micro Logistics is a division of Ingram Micro Inc., the world's largest IT distributor. IML is one of the largest B2B and B2C operations in the country. Its ability to leverage Ingram Micro's facilities, customers and experience gives it important advantages. In October 2012, Ingram Micro purchased BrightPoint, an industry-leading, telecommunications niche 3PL and distributor, for an estimated $840m.
Greatwide Logistics Services
Greatwide has a host of specialized trucking operations. Its dedicated contract carrier is the largest refrigerated-trailer-based operator. In addition, it is the only owner-operator-dominated (75 percent) DCC. Wal-Mart is its largest customer (approximately 50 percent of DCC revenue is from 11 of Wal-Mart's 39 DCs). Operations are DC to store. Average revenues run $135,000 to $140,000 per tractor reflective of the short haul nature of most of Greatwide's business. DCC operations have always been the strong point of Greatwide's offerings. In November 2009, Greatwide acquired YRC Logistics' Dedicated Contract Carriage division. DCC is about 55 percent of Greatwide's business. Greatwide also has heavy flatbed and good freight brokerage/transportation management. Greatwide is actively providing cross-docking services as part of upgraded value-added warehousing and distribution services.
In February, Greatwide Logistics Services and Cardinal Logistics Management announced that they had completed a merger of the two companies.
ModusLink Global Solutions
ModusLink Global Solutions provides supply chain management solutions for high-tech, high-value commodities. Its services include procurement, warehousing, fulfillment, customization, returns management, asset lifecycle management and e-commerce. It has eight warehouses in the United States, two in Mexico, five in Europe and fifteen in the Asia Pacific. Advanced Micro Devices, Hewlett-Packard, Sony and TomTom are a few of its major customers.
Commercial Warehousing provides dry and multi-temperature warehousing in Florida for the food and beverage vertical. It has five dry and three temp-controlled warehouses in Auburndale, one dry and two temp-controlled warehouses in Winter Haven, one dry warehouse in both Jacksonville and Groveland, and a temp-controlled warehouse in Bartow. Sister companies Willis Shaw Express and Midwest Coast Transport are long-time truckload standouts.
Fidelitone Logistics provides value-added warehousing and distribution in the U.S. It has made some recent acquisitions to expand its coverage and service capabilities. In May 2010, it acquired AADF Warehouse, a New Mexico-based distribution and transportation management provider. In December 2009, it acquired Premier Printing and Packaging of Mundelein, Ill.
Kenco Logistic Services
This established, North American-focused company is the largest diverse supplier of third-party logistics in the United States. Founded in 1950, Kenco provides integrated logistics solutions, including distribution and fulfillment, transportation management, material handling services, real estate brokerage and automotive logistics. Value-added services provided by Kenco include kitting, service parts packaging and distribution, sequencing, display assembly, reverse logistics, white-glove delivery and custom IT solutions. The company continues to grow its transportation management expertise and expand its dedicated contract carriage services in response to requests from its diverse customer base. Kenco services customers in the appliance/furniture, pharmaceutical, medical equipment, food and beverage, building materials, industrial manufacturing, apparel and consumer packaged goods industries. Long-term relationships, built around warehousing expertise and evolving into multiple logistics services, continue to be its strength. DuPont has been a Kenco customer since the early 1950s. It is believed that Kenco and DuPont initiated the first third-party, contract warehousing agreement in 1966 for the management of a newly constructed distribution center in Chattanooga, Tenn. Kenco also operates five facilities with over six million square feet of space in the U.S. and Canada for Whirlpool, a 33-year customer. Today, due to its WBENC certification, Kenco fulfills a unique market niche by offering high-quality and comprehensive services on a large scale while allowing customers to meet supplier diversity goals.
3PD makes nearly five million residential, business and job site deliveries every year. Its primary capabilities include white glove delivery and product installation, specialized job site delivery, dedicated contract carriage, product consolidation, and its newest retail and direct-to-home delivery solutions. Major industry sub-segments include appliances, furniture and building supplies. 3PD's drivers are contract carriers/owner operators following the pattern established by FedEx.
Hub Group is the largest intermodal marketing company (IMC) in the United States and one of the largest truck brokers. It uses its network to access containers and trailers owned by leasing companies, railroads and steamship lines. On a daily basis, it controls between 23,000 to 24,000 containers. Of those, 8,400 are owned and 7,660 are rented from either Norfolk Southern or Union Pacific. Hub recently diverted a significant amount of its TOFC/COFC business from BNSF to the UP. Once complete, the UP will handle 90 percent of all western U.S. loads for Hub. In April 2011, Hub acquired Mode Transportation. Mode Transportation was formerly known as Exel Transportation Services, an operating unit of Exel - a leading contract logistics provider in the Americas and part of the supply chain division of Deutsche Post DHL. Hub now reports two business segments, Hub and Mode. The Hub segment includes all business other than Mode. Hub's Comtrak Logistics subsidiary is a transportation company with services that include primarily rail and international drayage for the intermodal sector. Challenge Transportation, an intermodal drayage trucker, and Domestic Transport, an intermodal drayage and truckload services provider, were also acquired in 2011 to expand Comtrak's drayage network and offerings. Approximately 11 percent of Hub's revenues are from Unyson Logistics, a network management 3PL and cross-dock specialist, while 21 percent of revenues are from its expanding truck brokerage.
Cardinal Logistics Management
Cardinal has been a good dedicated contract carrier and transportation manager. Cardinal has gained significant business with CHEP, Home Depot, KraftMaid, Lowe's, Office Depot, and PetSmart. It has become a leading dedicated carrier with distribution center capability. In addition, Cardinal has put together a solid, integrated IT platform built around TMW, Appian and proprietary modules to handle transportation management, fleet management, warehousing, order management, network modeling and delivery point scanning. The emphasis for Cardinal is on integrated Fortune 1000 accounts with a dedicated contract carriage component. Jobsite and last mile delivery are provided regularly.
In February, Cardinal Logistics Management and Greatwide Logistics Services announced they had completed a merger of the two companies.
Since its start in 1960, DSC has grown from its dry storage warehousing roots into a true third-party integrated service provider involved in supply chain operations for more than 100 customers and managing entire networks as a lead logistics partner for several of those customers. DSC emphasizes strategic partnerships and customized solutions to meet customers' needs, and utilizes process management and sophisticated technologies to make facilities efficient and cost effective. In 2009, DSC implemented a network-wide sustainability initiative. DSC's warehouses are large: The average size is 430,000 square feet. One of its newest logistics centers is in Joliet, Ill., next to the BNSF intermodal/automotive hub. DSC's transportation management center has three dozen employees and handles about 3,000 shipments per day split fairly evenly between truckload and less-than-truckload. For its largest customers, DSC provides a range of transportation services, including inbound and outbound plant, inbound and outbound distribution center, and international transportation management. DSC's transportation management operation remains financially strong and continues to improve its bottom line. The TMS is MercuryGate. The WMS is RedPrairie and proprietary.
VersaCold Logistics Services
VersaCold is a major refrigerated/frozen warehousing specialist and domestic, perishables distributor. VersaCold has large trucking operations throughout Canada managing 290,000 shipments per year. VersaCold is a dominant player in British Columbia and Alberta.
LINC Logistics Company
LINC traditionally was a major player in automotive logistics. It delivers quality services for major automotive manufacturers and tier-one suppliers. LINC's operating excellence was demonstrated by its Gold Award from DaimlerChrysler for its Auburn Hills operation and its A+ assessment rating for its seven GM operations. LINC's service for major automotive manufacturers includes: transportation management, dedicated contract carriage, sequencing, sub-assembly, returnable containers management, kanban, just-in-time service to plants, kitting and export-import. As automotive opportunities have diminished, LINC has moved into other verticals. For DCC, LINC has two large owner-operator fleets - one in Detroit and one in Ontario. These short-haul fleets primarily support automotive operations. About 90 percent of contracts are one-year, evergreen arrangements, providing greater flexibility.
FedEx Supply Chain/FedEx Trade Networks
Contract logistics, freight forwarding and customs brokerage at FedEx are value-added service businesses whose role is to support FedEx express, package and less-than-truckload transportation. FedEx Supply Chain does not compete on isolated value-added warehousing and distribution business. FedEx Trade Networks has added 50 overseas offices in the last couple of years. FedEx has also expanded its pharmaceutical offerings. FedEx announced a major restructuring of its express business in October 2012. Its LTL operations have increased and turned profitable. Freight forwarding is expanding.
Saddle Creek Logistics Services
Saddle Creek provides third-party logistics services in the Southeast and Southwest U.S. Its food grade facilities are rated "Superior" by A.I.B. Saddle Creek specializes in campuses with two or more buildings. It deals heavily in high-volume, palletized retail products and fast-moving consumer goods. Home Depot, Quaker, Coca-Cola and Sam's are major customers. Trucking operations emphasize local and short-haul deliveries. All trailers are day cabs. Revenues are split 33 percent for dedicated warehousing, 29 percent for public warehousing, 30 percent for transportation and 8 percent for packaging. Customers normally use an integrated combination of services. A major push is on to move Saddle Creek to a national company. In November 2009, Saddle Creek acquired ServiceCraft Logistics, a consumer goods distribution specialist. In December 2010, Saddle Creek acquired ProLog Logistics, an order fulfillment specialist.
BDP is a leading freight forwarder with a strong emphasis on chemicals. Its operations are high quality. BDP handles customs brokerage for Dow Chemical and DuPont on about 600,000 containers a year.
Agility has expanded its business dramatically from its warehousing base in Kuwait. It is a Middle Eastern leader in integrated supply chain solutions and is organized into three major business groups. Global Integrated Logistics (GIL) is the largest, generating approximately 65 percent of Agility's revenues and having more than 14,000 employees. The majority of GIL's revenues (just under 90 percent) are generated outside of the U.S. It has core competencies in freight forwarding, contract logistics/warehousing, project logistics, fairs and events, and supply chain management 3PL services. Agility provides 3PL services tailored to governments, relief agencies and international institutions worldwide. These services included extensive warehousing and trucking operations in Kuwait to support U.S. Department of Defense distribution needs in the region. Another business unit is Investments, which draws on local insights from Agility's global network to identify real estate and private equity opportunities in Asia, Africa and the Middle East. Investments accounts for approximately 3 percent of Agility's revenues.
Total Quality Logistics
Total Quality Logistics has grown to over $1bn in gross revenue since 1997. It moves over 500,000 truckloads annually with almost half being temperature-controlled (reefer) loads. Total Quality Logistics is one of the largest U.S. freight brokers. On-demand transportation services are available 24/7/365 through a single point of contact.
Warehouse Services provides its integrated service offerings in 19 U.S. states. It recently acquired contract design and sewing company, Sample Specialist, to expand its apparel expertise and related services.
Landstar continues to adapt to its customers and agents needs. Over the last three years, Landstar has added freight forwarding and stronger transportation management capabilities. These competencies meet expanding customer needs and provide Landstar's network of agents with better tool kits for rapidly changing markets. The push has been from the top. Chairman, President and CEO Henry Gerkens is responsible for intermodal, air, ocean, freight under management and logistics technology services as well as the logistics engineering and analytical design function.
C.R. England is a premier refrigerated carrier. It is expanding primarily through replacement of refrigerated private fleets. Wal-Mart is the largest customer (275 tractors). The average round trip is 580 miles. Cooperation with the companies over-the-road fleet is good. Commitments to customers, on three-fourths of the business, are by number of units not specific unit numbers. England Logistics delivers a broad spectrum of expanding transportation services including full truckload and LTL brokerage, traffic management, refrigerated intermodal, dedicated contract carriage, import/export container hauling, agent operations and transportation consulting. These offerings have enabled C.R. England to transition from a strictly refrigerated carrier to a full-transportation provider.
Damco International (Americas)
Damco is a third-party logistics provider specializing in customized freight forwarding and supply chain solutions. The company has 10,800 employees in over 300 offices across 90 countries and agents in 30 more countries. In 2011, the company had a net turnover of $2.8bn, managed more than 2.5 million TEUs in ocean freight and supply chain management volumes, and airfreighted more than 110,000 metric tons. Damco is part of the A.P. Moller - Maersk Group.
G&D Integrated was formed through the combination of sister companies G&D Transportation, CDO Distribution and Specialized Process Services. Its industry focus is in industrial/heavy equipment and automotive manufacturing.
Averitt Express Supply Chain Solutions
Averitt is a quality transportation and logistics provider emphasizing service to the southeastern U.S. Averitt has partners for Canada and Mexico. In addition, it is providing international transportation management for companies like VF Corporation. Averitt participates in the Free and Secure Trade (FAST) program, Customs Trade Partnership Against Terrorism (C-TPAT), Partners in Prevention (PIP), and the Customs Self Assessment (CSA) program. Averitt expanded from being an LTL carrier to a third-party logistics provider starting with automotive opportunities. Averitt has on-site managers in 35 locations.
Click here for the A&A's Top 50 North American-based 3PLs chart (Largest 3PLs Ranked by 2011 Logistics Gross Revenue).
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