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U.S. third-party logistics providers boosted their net revenues by 7.2 percent, to $122bn, last year, despite a sluggish freight market. And 3PLs will continue to grow over the next three years, according to a new report by Armstrong & Associates, Inc. The firm predicts that U.S. 3PL revenues will grow by a modest 5.5 percent this year and 7.5 percent in 2009, then top $150bn in 2010. "3PL growth continues to be driven by companies outsourcing to concentrate on core competencies, the need for sophisticated supply chain information technology solutions, and globalization," Armstrong says. In fact, 3PL revenues continue to increase at three times the growth rate of U.S. gross domestic product, with the highest numbers seen in the non-asset-based sector. International transportation management, led by Expeditors International, Kuehne & Nagel and DHL Global Forwarding, grew by 9.5 percent last year, while the U.S. domestic side, dominated by C.H. Robinson, was up 8 percent.
Industry consolidation continued in 2007, Armstrong reports. Investors showed a preference for non-asset-based providers. At the same time, Wall Street analysts grew concerned about lower profit margins in value-added warehousing and distribution, even though that sector continues to lead by a substantial margin all other aspects of 3PL activities.
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