The third-party logistics (3PL) market continues to showcase a decline in shipments, invoice amount per shipment, and total revenue compared to the fourth quarter of 2023, according to research from The Transportation Intermediaries Association (TIA).
“Overall volumes in Q124 being down from Q123 is not a surprise given the market dynamics, but there are encouraging signs,” says TIA chairman of the board Mark Christos. “Truckload and Intermodal volume was down, but had its best performance in the last four quarters. Compared to Q423, Truckload and LTL volume increased and that is an encouraging sign for any Q1 volume to exceed a Q4.”
Key takeaways:
- The report outlines a decline across the board since last quarter. Total shipments experienced a 3.7% quarter-over-quarter (QoQ) decrease and an 8.9% year- over-year (YoY) decline. The invoice amount per shipment dropped by 4.4% QoQ and showed a 13.8% YoY decrease.
- Total revenue witnessed an 0.8% QoQ decline and a substantial 21.4% YoY decrease. The gross margin decreased by 60 basis points compared to the third quarter, and it experienced a significant YoY decline.
- Smaller brokers surpassed their larger peers in quarter-to-quarter performance regarding invoice amount per load, however medium sized brokers won the day in terms of gross margin.
- Invoice dollars and invoice amounts per load decreased in all modes, but there was an improvement in the total shipments across truckload and LTL. There was still a decrease in gross margin across all modes.
- Brokers' key performance indicators showed a universal decline YoY in the first quarter of 2024. Shipments were the most resilient, but still experienced a nearly 9% decline compared to the previous year. Revenue decreased by over 21%, and the amount invoiced per shipment was down by almost 14%. The YoY margin comparison in Q124 was significantly weaker.
"While we continue to see some decline, this is not surprising in the first quarter as first quarters annually are slower given the winter season," says Anne Reinke, president and CEO of TIA. "While our current view of the market has not changed dramatically, we are still positive as we head into quarters 2 and 3, which historically are busier. Plus, as we have predicted for some time now, the market is correcting itself from the unbelievable highs of the pandemic. It will be a while before the economic correction settles down."
