3PLs Dominate U.S. Warehousing Market

Third-party logistics providers take top 20 spots among warehouse players, consultancy finds

Stoughton, WI — May 1, 2003 — Third party logistics providers (3PLs) dominate the $19 billion U.S. commercial warehousing market, comprising the top 20 players in this sector, according to a new study from supply chain management consulting firm Armstrong & Associates.

In the latest edition of Armstrong's report "Who's Who in Logistics," the consultancy estimated that 3PLs occupy 485 million square feet of warehouse space, while the total U.S. public/contract warehousing market stood at 650 million square feet. Commercial warehouse operations occupy about 10 percent of total U.S. warehousing space, according to the report.

Armstrong's analysis indicated that U.S. 3PLs increased their net revenues in the 2002 fiscal year to $13 billion. "Profitability for U.S. warehousemen improved in 2002," said Dick Armstrong, president of Armstrong & Associates. "Net profits improved from .7 percent to 1.8 percent of net revenue in 2002. We believe that 3PL pricing has stabilized in this segment and margins should hold or improve this year."

Total U.S. warehousing costs were estimated by Robert Delaney of Cass Logistics to be $78 billion in 2001.

Armstrong estimates that there are 600 medium to large warehouse operators in the United States. Of the top 25 commercial warehouses, the consultancy covers 22 in its report, and the top 20 are all 3PLs.

The largest is Exel, a company with home offices in Britain and 56.5 million square feet of warehousing space in North America. Exel is followed by APL Logistics, UPS Supply Chain Solutions and Americold, which is the largest refrigerated and frozen warehouse operator.