3PL: Revenues and Profits Up

STOUGHTON, Wis., March 24 /PRNewswire/ — For the ninth consecutive year, U.S. growth in third-party, contract logistics services exceeded U.S. economic growth. Net revenues for FY 2003 grew by 6% to $32.9 billion following 7% growth for FY 2002. Net income increased to 4% of net revenue from 3% in FY 2002 and 1.7% in FY 2001. Turnover (gross revenues) increased by 8.2% to $76.9 billion.

Individual company results varied with select companies posting strong results. Value-added transportation manager C.H. Robinson continued to improve its best-in-class results by increasing net revenue (gross margin) by 12.6%. Its net after-tax income margin increased to 20.9%. Net revenue was $545 million. Net income was $114. The leadership baton has been passed at C.H. Robinson and the new team, measured by the results, is very good.

International transportation manager, Expeditors International, maintained its excellent operations. Net revenues were up 10.1%. Profitability continued at high levels with net after-tax income margins of 16.2%.

The other transportation manager with top quality results was Landstar Logistics. Landstar’s net revenue was up 18.4% to an Armstrong & Associates’ estimated $58 million. Net after-tax profitability is estimated at 10%. Landstar’s agent model has been extended to include international transportation management.

Among midsized value-added warehouse distribution (VAWD) 3PLs, Kenco, Genco and DSC all had revenue growth exceeding 10%. Net after-tax profitability for the VAWD segment improved to 2.3% from 1.7% in FY 2002. Exel and UPS SCS continue to be the major players in VAWD. Both had good growth and improved profitability.

UPS SCS has reached $2.1 billion in net revenue. UPS SCS was profitable in all four quarters of FY 2003. Standard UPS operating efficiencies are taking hold.

Of the 35 companies in our core tracking group, 89% had increases in net revenues for FY 2003.

The complete report for 2003 can be obtained by contacting Armstrong & Associates. Armstrong & Associates’ Extended Information Service subscribers will receive the report next week.

About Armstrong & Associates: Armstrong & Associates, Inc. is a supply chain management consulting firm specializing in market research, mergers and acquisitions and outsourcing. Armstrong & Associates publishes Who’s Who In Logistics? Armstrong’s Guide to Global Supply Chain Management. Recent research papers include Warehousing in the United States and Global Logistics Services Providers II. In addition, Armstrong & Associates maintains databases of warehousemen, freight forwarders and third-party logistics and distributing companies.

Source: Armstrong & Associates, Inc.

CONTACT: Richard Armstrong of Armstrong & Associates, Inc.,

1-800-525-3915, [email protected]

Web site: http://www.3plogistics.com/