1. Current State of
Third-Party Logistics
Phone: +1-608-873-8929
Website: www.3PLogistics.com

2. About 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
©Copyright 2010 Armstrong & Associates, Inc.

3. http://www.3plogistics.com/Site_Visits.htm
3 ©Copyright 2010 Armstrong & Associates, Inc.

4. Value-Added Services & Capabilities
Domestic and Int’l Transportation Management
Cargo Insurance
Carrier Contracting/Brokering/Freight Payment
Both – 3PL/4PL Customs Brokerage/ACE/C-TPAT/FAST
4PL/Lead Logistics Provider Duty Drawback Processing
Call Centers Incoterms Management – EXW to DDP
Consolidation/Deconsolidation Letters of Credit/Negotiable BOLs
Consulting/Process Reengineering Merge-In Transit
EDI Handling NVOCC
Financial Services Project Logistics
Food Grade/Temperature Controlled Project Management
Hazmat Skills Transportation Execution
Purchase Order Management Transportation Network Planning/Optimization
Internet Supply Chain Visibility
Inventory/Vendor Management Warehousing/Cross-docking
ISO Certification Bonded Warehouses
Pool Distribution/Cross-docking Home Delivery
Radio Frequency/RFID Installation/Removal
Security Processes JIT/Kanban
Sourcing Skills Kitting/Pick & Pack
Light Manufacturing/Assembly
Reverse Logistics
Small Package/Fulfillment
Easily Deployable WMS
Tier 1 GSCM’s provide these services and capabilities in global markets.
4 ©Copyright 2010 Armstrong & Associates, Inc.

5. Drivers of Global 3PL Market Growth
Low-Cost Regulatory Off-Shoring &
Country Sourcing Compliance Outsourced Mfg.
Cost Focus on Core
Reductions Competencies
Operational Expanding IT
Efficiencies Requirements
Need Regional & Local Market Expertise
3PLs provide the infrastructure necessary to support
increasingly complex supply chains involved in global trade.
5 ©Copyright 2010 Armstrong & Associates, Inc.

6. Changes in U.S. Truck Tonnage
Source: American Trucking Associations
6 ©Copyright 2010 Armstrong & Associates, Inc.

7. Freight Forwarders Volume 2008 – 2010E
Source: Company data, Morgan Stanley Research
7 ©Copyright 2010 Armstrong & Associates, Inc.

8. Freight Forwarders Volume 2008 – 2010E
Source: Company data, Morgan Stanley Research
8 ©Copyright 2010 Armstrong & Associates, Inc.

9. 2009 Global Logistics Costs & 3PL Revenue
Global 3PL Market = US$ 507 Billion
9 ©Copyright 2010 Armstrong & Associates, Inc.

10. Top Global Fortune 500 Buyers of 3PL Services
37
42
49 37
30
32
31
29
29
27
26 23
23
10 ©Copyright 2010 Armstrong & Associates, Inc.

11. Trends in 3PL/Customer Relationships
% of Domestic Fortune 500 Companies using 3PLs
11 ©Copyright 2010 Armstrong & Associates, Inc.

12. Global 3PL Revenues by Select Vertical Industries
12 ©Copyright 2010 Armstrong & Associates, Inc.

13. Tier 1 3PLs
Global Supply Chain Managers
DHL Logistics UPS SCS Kuehne + Nagel
FedEx SCS/TN CEVA Logistics
DB Schenker CAT Logistics
Freight
Major Markets Forwarders
C.H. Robinson Panalpina
Expeditors APL Logistics
Penske NYK Logistics
Ryder Nippon Express
Geodis UTi Worldwide
Agility Kintetsu World Exp
Menlo Hellmann Worldwide
DSV
13 ©Copyright 2010 Armstrong & Associates, Inc.

14. U.S. 3PL Market 1996 – 2010E
(US$ Billions)
1996 – 2009 CAGR = 10.1%
-16%
14 ©Copyright 2010 Armstrong & Associates, Inc.

15. 2009 U.S. 3PL Segment Revenues
Gross Revenue
3PL (Turnover) % Decline Net Revenue % Decline
Segment (US$ Billions) 2009 vs. 2008 (US$ Billions) 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
* 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 ©Copyright 2010 Armstrong & Associates, Inc.

16. 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.

17. U.S. 3PL Segment Net Revenue Trends (US$ Millions)
3PL % Decline CAGR % Change
Segment 2009 vs. 2008 1995–2009 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.

18. U.S. 3PL Segment Net Income Margins
18 ©Copyright 2010 Armstrong & Associates, Inc.

19. 2009 vs. 2008 U.S. 3PL Market Momentum
12 ©Copyright 2010 Armstrong & Associates, Inc.

20. Top 25 North American Warehousing 3PLs
Total Square Feet
Third-Party Logistics Provider (3PL) (Millions) Number of Facilities
DHL Supply Chain/Exel 99 511
GENCO Supply Chain Solutions 37 123
Jacobson Companies 35 145
CEVA Logistics (The Americas) 33 164
Caterpillar Logistics Services 29 130
OHL 28.3 120
Americold Logistics 27 104
APL Logistics 26.1 166
Kenco Logistic Services 25 100
UTi Worldwide 24.3 234
VersaCold Logistics Services 23 126
MBX Logistics 20 51
UPS Supply Chain Solutions 20 100
Menlo Worldwide Logistics 18 120
NFI 18 51
DSC Logistics 15 37
Ryder System 15 252
Saddle Creek 15 52
20 ©Copyright 2010 Armstrong & Associates, Inc.

21. Top 25 North American Warehousing 3PLs (Continued)
Total Square Feet
Third-Party Logistics Provider (3PL) (Millions) Number of Facilities
Warehouse Specialists 14 45
Penske Logistics 12.3 101
DB Schenker Americas 12 80
Schneider Logistics 12 33
Syncreon 12 70
Total Logistic Control 9.1 29
Kane Is Able 8.5 17
21 ©Copyright 2010 Armstrong & Associates, Inc.

22. 3PL Information Technology Trends
 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 ©Copyright 2010 Armstrong & Associates, Inc.

23. Thank You!
Milwaukee Wisconsin Office Stoughton Wisconsin Office
Evan Armstrong Richard Armstrong
Armstrong & Associates, Inc. Armstrong & Associates, Inc.
10401 West Lincoln Avenue 100 Business Park Circle
Suite 207 Suite 202
West Allis, WI 53227 USA Stoughton, WI 53589 USA
414-545-3838 608-873-8929