3PLs Dominate U.S. Warehousing Market

STOUGHTON, WI - Research by Armstrong & Associates, Inc. indicates that third party logistics providers dominate the U.S. commercial warehousing market. The analysis indicates that U.S. 3PLs increased their net revenues in FY 2002 to $13 billion. Total square footage occupied by 3PL warehousing activities is 485 million square feet. Armstrong & Associates estimates the total U.S. public/contract warehousing market at $19 billion with 650 million square feet of space. Commercial warehouse operations occupy about 10% of total U.S. warehousing space. Total U.S. warehousing costs are estimated to be $78 billion (FY 2001) by Robert Delaney of Cass Logistics.

"We think there are 600 medium to large sized warehousemen in the United States," said Dick Armstrong, President of Armstrong & Associates. "Of the top 25 commercial warehouses, we cover 22 in 'Who's Who In Logistics.'"

Armstrong & Associates' top 20 are all 3PLs. The largest is Exel, a company with home offices in Britain. Exel has 56.5 million square feet of warehousing space in North America. Exel is followed by APL Logistics, UPS Supply Chain Solutions and Americold. Americold is the largest refrigerated and frozen warehouseman.

"Profitability for U.S. warehousemen improved in FY 2002," said Armstrong. "Net profits improved from 0.7% to 1.8% of net revenue in 2002. We believe that 3PL pricing has stabilized in this segment and margins should hold or improve this year."

Armstrong’s complete report on U.S. warehousing is available in the newly issued 11th Edition of 'Who's Who In Logistics? Armstrong’s Guide to Global Supply Chain Management.'"

Armstrong & Associates, Inc. is a supply chain management consulting firm specializing in market research, mergers and acquisitions and outsourcing.

For more information, contact www.3PLogistics.com

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