Home » 3PL/4PL, Breaking News » 3PL CEOs confident of continued revenue growth

Despite a slow economy, logistics companies in the United States, Europe, and the Asia-Pacific see growth in revenues over the next three years, according to a new survey of CEOs from global 3PLs.

North American chief executive officers have their sights set on growth, expecting revenues to climb by an average of 14.6 percent over the next three years, says the 20th Annual Survey of Third-Party Logistics Provider CEOs, sponsored by Penske Logistics. The region was the only one where company projections were higher than last year.

Asia-Pacific and European 3PL heads projected annual company revenue growth rates of 11.6 percent and 10.3 percent, respectively.

On revenue growth for the next three years in all three regions, the CEOs forecast average annual growth rates of 8.29 percent in North America, 8 percent in the Asia-Pacific region, and 5.9 percent in Europe.

The findings analyzed responses from 34 major 3PL CEOs from the three regions whose companies generated about US$50 billion in revenue in 2012.

More than two-thirds of these companies were profitable during 2012. Some 52 percent of the surveyed either met or exceeded their revenue projections last year, down from 63 percent in 2011.

The continued instability of the Euro zone economy and migration of some manufacturing out of China were cited for the lower profitability in Europe and Asia-Pacific.

However, regional opportunities are instilling confidence in the industry, the survey notes.

“Despite Euro zone challenges and some slowing of manufacturing activity in China, opportunities to expand services geographically have both regions poised for growth,” said survey author Dr. Robert Lieb, professor of Supply Chain Management at D’Amore-McKim School of Business in Northeastern University, Massachusetts.

“Expansion into eastern Europe and Russia and an increased focus on servicing domestic consumption within China provide 3PLs with the opportunity to strengthen and stabilize their operations in those regions by filling out the services offered and customer base,” he added.

The survey revealed that some manufacturing activity is leaving China, impacting both Asia-Pacific and North American regions significantly. Within Asia-Pacific, 78 percent of CEOs claimed that rising wage costs in China have caused companies to shift some manufacturing and export consolidation to lower-priced geographies, including Thailand, Vietnam, Indonesia, and Sri Lanka.

In the North American region, the migration toward near-shoring continues, with some key 3PL accounts moving from Asia-Pacific to Mexico. In particular, companies in the automotive, technology, and pharmaceutical industries have moved some sourcing and manufacturing activities to Mexico.

“As companies begin shifting their product origins to local regions, they will look for a third-party logistics provider that can strategically navigate through the new normal in the supply chain industry,” stated the report. “This includes the shift in supply chain length, changes in speed, and demand for warehousing and transportation along trade corridors.”

Companies that participated in the annual survey included Agility Logistics, Cardinal Logistics, CEVA Logistics, DB Schenker, DHL Excel Supply Chain, DSC Logistics, Genco Supply Chain Solutions, Kuehne + Nagel Logistics, Menlo Logistics, MIQ Logistics, Neovia Logistics, Penske Logistics, Rhenus Contract Logistics, Transplace, UPS Supply Chain Solutions, Uti Integrated Logistics, and Werner Logistics.


Photo: Gwan Kho

No comments yet... Be the first to leave a reply!

Leave a Reply

Your email address will not be published. Required fields are marked *

five × 4 =