+1 800 967-0030

Wall Street Journal: 3PLs See Fast Growth From Outsourcing

It’s been an incredible year to be one of the many 3rd party logistics companies in the U.S. market.

Not only is the economy improving, driving natural growth, but also companies across the country are beginning to see the value of partnering with a 3PL as their businesses again expand. Revenues are up 7.4 percent, to $157.2 billion dollars across the industry, a much faster growth than the 2.8 percent growth in logistics spending overall would indicate.

Growth Means Good News Overall

The impressive growth of 3PLs is largely due to the overall growth of retail and manufacturing sectors, both of which are looking to expand to pre-recession levels. During the recession, most of these distributors minimized their operations to save overhead and many trucking companies closed due to lack of demand. Now that demand for both shipping and warehouse space are again increasing, 3PLs are helping to fill in the gaps.

With flexible storage options and the ability to hire and manage their own teams of truckers, 3PLs have been the perfect choice for many retailers as their demand began to expand again. Instead of risking their own capital by investing in facilities and employees that might still be just temporary blips on the economic radar, choosing to work with a 3PL provides warehouse space and employees trained in the fine art of order fulfillment at a fraction of the cost.

But this is only the tip of the iceberg, according to Dick Armstrong, president of Armstrong and Associates, in a recent Wall Street Journal look at this topic. His company predicts that U.S. 3PL revenues will grow another 5.7 percent to $166.1 billion next year and will see revenues of $195.8 billion by 2018. Armstrong and Associates aren’t just predicting huge growth on home soil, though — 3PLs are expected to capture a larger share of global logistics spending, up to about 8.2 percent globally and as much as 14 percent in some markets.

3PLs Bring A Lot of Value

Companies that would have handled their own warehousing and distribution at one time are now realizing the value a 3PL can bring them. Joe Carlier, senior vice president of sales at Penske Logistics, indicates that his business is growing rapidly due to expanding demand from companies that might have not used logistics services in the past.

“As business has increased, customers are saying they need to increase their warehousing as they build up their inventories,” said Carlier in the same WSJ look at the 3PL sector. “But rather than build for themselves, they’re looking to third-party providers. Rather than go through the challenges of hiring drivers, they’re outsourcing.”

July 28, 2015
Share This:

Related Posts

RECENT POSTS

Holiday-Proof Your Website

According to the National Retail Federation, holiday sales for 2022 are expected to increase between 6% and 8% over 2021. Furthermore, NRF predicts that online and other non-store sales will increase between 10% and 12% to between $262.8 billion and $267.6 billion....

Fulfillment Services in Fort Lauderdale, FL

3PL Services Serving Fort Lauderdale, FL If your e-commerce business is based in or near Fort Lauderdale, FL, chances are, you are familiar with the benefits of third-party fulfillment services near you. World famous for its expansive canals, Fort Lauderdale is loved...

3 Tips To Earn Customer Loyalty

Cracking the Customer Loyalty Code The latest statistics about customer loyalty show that as much as 97% of consumers are loyal to at least one brand. Food (62%), fashion (57%), and personal electronics (44%) are three areas where clients tend to show more loyalty...

How to Choose a 3PL for Your SquareSpace Store

Outsource Fulfillment To A SquareSpace-Friendly 3PL  If you use SquareSpace, you are familiar with the easy-to-use, all-in-one website builder tool. Created in 2004 as a solution to enable people without web development skills to build and maintain their own websites,...

Holiday Order Fulfillment

Happy Holidays, Now Let’s Ship Some Orders  The Q4 holidays make up the busiest shopping season of the year, every year. In 2022, US holiday retail sales are expected to reach $1.3 trillion, a 3.3% increase over 2021. Holiday ecommerce is expected to grow 15.5% to...