evan armstrong from armstrong & associates on ‘examining the state of third party logistics -...
TRANSCRIPT
Current State of Third-Party Logistics
Phone: +1-608-873-8929
Website: www.3PLogistics.com
©Copyright 2010 Armstrong & Associates, Inc.
Founded in 1980 Supply Chain Market Research and Consulting Services Current Research:
Who's Who Logistics and Supply Chain Management – Americas Who's Who in Logistics and Supply Chain Management – International Warehousing in North America – 2009 Market Size, Major 3PLs,
Benchmarking Costs, Prices and Practices Targeted in-depth market research papers
Articles & Press Coverage: American Shipper, Global Logistics & Supply Chain Strategies, Journal of Commerce, Logistics Management, Logistics Quarterly, Modern Materials Handling, Traffic World, Transport Topics, Wall Street Journal
Consulting Services: Logistics Outsourcing, 3PL Strategic Planning, Mergers & Acquisitions, Benchmarking, Expert Witness, 3PL Capabilities Audits, Targeted Research
Global Resources: U.S. Organization; Eric Xiang, Shanghai China; Latin America, Japan and South Korea Alliance Partners
Founded in 1980 Supply Chain Market Research and Consulting Services Current Research:
Who's Who Logistics and Supply Chain Management – Americas Who's Who in Logistics and Supply Chain Management – International Warehousing in North America – 2009 Market Size, Major 3PLs,
Benchmarking Costs, Prices and Practices Targeted in-depth market research papers
Articles & Press Coverage: American Shipper, Global Logistics & Supply Chain Strategies, Journal of Commerce, Logistics Management, Logistics Quarterly, Modern Materials Handling, Traffic World, Transport Topics, Wall Street Journal
Consulting Services: Logistics Outsourcing, 3PL Strategic Planning, Mergers & Acquisitions, Benchmarking, Expert Witness, 3PL Capabilities Audits, Targeted Research
Global Resources: U.S. Organization; Eric Xiang, Shanghai China; Latin America, Japan and South Korea Alliance Partners
About Armstrong & Associates, Inc.
©Copyright 2010 Armstrong & Associates, Inc.
http://www.3plogistics.com/Site_Visits.htm
3
©Copyright 2010 Armstrong & Associates, Inc.
Value-Added Services & Capabilities Domestic and Int’l Transportation Management
Cargo Insurance Carrier Contracting/Brokering/Freight Payment
Customs Brokerage/ACE/C-TPAT/FAST Duty Drawback Processing
Incoterms Management – EXW to DDP Letters of Credit/Negotiable BOLs
Merge-In Transit NVOCC
Project Logistics Project Management
Transportation Execution Transportation Network Planning/Optimization
Warehousing/Cross-docking Bonded Warehouses
Home Delivery Installation/Removal
JIT/Kanban Kitting/Pick & Pack
Light Manufacturing/Assembly Reverse Logistics
Small Package/Fulfillment Easily Deployable WMS
Both – 3PL/4PL 4PL/Lead Logistics Provider
Call Centers Consolidation/Deconsolidation
Consulting/Process Reengineering EDI Handling
Financial Services Food Grade/Temperature Controlled
Hazmat Skills Purchase Order Management
Internet Supply Chain Visibility Inventory/Vendor Management
ISO Certification Pool Distribution/Cross-docking
Radio Frequency/RFID Security Processes
Sourcing Skills
Tier 1 GSCM’s provide these services and capabilities in global markets. 4
©Copyright 2010 Armstrong & Associates, Inc.
Drivers of Global 3PL Market Growth
3PLs provide the infrastructure necessary to support increasingly complex supply chains involved in global trade.
3PLs provide the infrastructure necessary to support increasingly complex supply chains involved in global trade.
Low-Cost Country Sourcing
Low-Cost Country Sourcing
Off-Shoring & Outsourced Mfg.
Off-Shoring & Outsourced Mfg.
Need Regional & Local Market Expertise Need Regional & Local Market Expertise
Focus on Core Competencies Focus on Core Competencies
Expanding IT Requirements Expanding IT Requirements
Cost Reductions
Cost Reductions
Operational Efficiencies Operational Efficiencies
Regulatory Compliance Regulatory Compliance
5
©Copyright 2010 Armstrong & Associates, Inc.
Changes in U.S. Truck Tonnage
Source: American Trucking Associations
6
©Copyright 2010 Armstrong & Associates, Inc.
Freight Forwarders Volume 2008 – 2010E
Source: Company data, Morgan Stanley Research
7
©Copyright 2010 Armstrong & Associates, Inc.
Freight Forwarders Volume 2008 – 2010E
Source: Company data, Morgan Stanley Research
8
©Copyright 2010 Armstrong & Associates, Inc.
2009 Global Logistics Costs & 3PL Revenue
Global 3PL Market = US$ 507 Billion
9
©Copyright 2010 Armstrong & Associates, Inc.
Top Global Fortune 500 Buyers of 3PL Services
49
37
32
37
27 26
42
23
30
29
29
23
31
10
©Copyright 2010 Armstrong & Associates, Inc.
Trends in 3PL/Customer Relationships
% of Domestic Fortune 500 Companies using 3PLs
11
©Copyright 2010 Armstrong & Associates, Inc.
Global 3PL Revenues by Select Vertical Industries
12
©Copyright 2010 Armstrong & Associates, Inc.
Kuehne + Nagel DHL Logistics UPS SCS
FedEx SCS/TN CEVA Logistics DB Schenker CAT Logistics
Major Markets Freight
C.H. Robinson Expeditors
Penske Ryder
DSV
Geodis Agility
UTi Worldwide
Hellmann Worldwide
Nippon Express
Kintetsu World Exp
NYK Logistics APL Logistics Panalpina
Forwarders
Global Supply Chain Managers Tier 1 3PLs
Menlo
13
©Copyright 2010 Armstrong & Associates, Inc.
U.S. 3PL Market 1996 – 2010E (US$ Billions)
1996 – 2009 CAGR = 10.1%
-16%
14
©Copyright 2010 Armstrong & Associates, Inc.
2009 U.S. 3PL Segment Revenues
* Total 2009 gross revenue (turnover) for the 3PL market in the U.S. is estimated at $107.1 billion. $3 billion is included for the contract logistics software segment.
15
3PL Segment
Gross Revenue (Turnover)
(US$ Billions) % Decline
2009 vs. 2008 Net Revenue (US$ Billions)
% Decline 2009 vs. 2008
DTM 31.8 ‐15.1 5.2 ‐11.4 ITM 35.1 ‐23.7 14.6 ‐18.9 DCC 9.4 ‐16.0 9.2 ‐15.9 VAWD 27.8 ‐5.3 21.9 ‐6.9
Total* 104.1 ‐16.0 50.9 ‐12.7
©Copyright 2010 Armstrong & Associates, Inc.
2010 U.S. 3PL Gross Revenue Growth Estimates
¹ Total 2010E gross revenue (turnover) for the 3PL market in the U.S. is estimated at $121.4 billion. $3 billion is included for the contract logistics software segment.
16
©Copyright 2010 Armstrong & Associates, Inc.
U.S. 3PL Segment Net Revenue Trends (US$ Millions)
3PL Segment
% Decline 2009 vs. 2008
CAGR 1995–2009
% Change 2010E vs. 2009
DTM -11.4% 11.9% 8.0%
ITM -18.9% 15.7% 12.0%
DCC -15.9% 7.3% 6.0%
VAWD -6.9% 14.9% 7.0%
Total -12.7% 12.7% 8.3%
17
©Copyright 2010 Armstrong & Associates, Inc.
U.S. 3PL Segment Net Income Margins
18
©Copyright 2010 Armstrong & Associates, Inc.
2009 vs. 2008 U.S. 3PL Market Momentum
12
©Copyright 2010 Armstrong & Associates, Inc.
Top 25 North American Warehousing 3PLs
20
Third-Party Logistics Provider (3PL) Total Square Feet
(Millions) Number of FacilitiesDHL Supply Chain/Exel 99 511GENCO Supply Chain Solutions 37 123Jacobson Companies 35 145CEVA Logistics (The Americas) 33 164Caterpillar Logistics Services 29 130OHL 28.3 120Americold Logistics 27 104APL Logistics 26.1 166Kenco Logistic Services 25 100UTi Worldwide 24.3 234VersaCold Logistics Services 23 126MBX Logistics 20 51UPS Supply Chain Solutions 20 100Menlo Worldwide Logistics 18 120NFI 18 51DSC Logistics 15 37Ryder System 15 252Saddle Creek 15 52
©Copyright 2010 Armstrong & Associates, Inc.
Top 25 North American Warehousing 3PLs (Continued)
21
Third-Party Logistics Provider (3PL) Total Square Feet
(Millions) Number of FacilitiesWarehouse Specialists 14 45Penske Logistics 12.3 101DB Schenker Americas 12 80Schneider Logistics 12 33Syncreon 12 70Total Logistic Control 9.1 29Kane Is Able 8.5 17
©Copyright 2010 Armstrong & Associates, Inc.
I.T. is a top reason for companies outsourcing logistics. Solid I.T. is critical to remain competitive and strengthen a 3PLs
brand. 3PLs are striving for an integrated “base” systems
backbone. Menlo: TTMS, Infor/CAPS, Proprietary LMS, WMS (Provia
modified), Menlo VIEW (Viewlocity) Penske: i2 Technologies, Infor/EXE, Proprietary LMS, RT
Systems, MARC C.H. Robinson: Proprietary ExpressTMS, HighJump
22
3PL Information Technology Trends
Thank You!
Stoughton Wisconsin Office Richard Armstrong
Armstrong & Associates, Inc. 100 Business Park Circle
Suite 202 Stoughton, WI 53589 USA
608-873-8929
Milwaukee Wisconsin Office Evan Armstrong
Armstrong & Associates, Inc. 10401 West Lincoln Avenue
Suite 207 West Allis, WI 53227 USA
414-545-3838