STUDY: 3PL CONTRACTS POST DOUBLE-DIGIT GROWTH IN 1999

   Third party contract logistics services grew 16.5 percent in 1999, according to Armstrong & Associates Inc., a logistics management consulting firm.
   Armstrong said its results were based on an analysis of 38 industry leaders accounting for more than one half of U.S. revenues.
   The consultant expects overall growth to continue in the 15 to 20 percent range for the next three or four years.
   "Many Fortune 500 companies have not outsourced transportation, warehouse and inventory management functions that are not parts of their core competencies," Armstrong said. "In addition, many small and midsize companies are the right size too have their integrated supply chains managed by  a single, contract logistics company."
   E-commerce fulfillment will expand the roles of traditional 3PLs and merger and acquisition activities will continue to change the 3PL landscape, the consultant said.
   Domestic management and dedicated contract carriage grew 18 percent while warehouse-based integrated services grew 16 percent. Non-asset-based
international transportation management grew at 11 percent, as the Asian
economic difficulties eased.
   U.S.-based 3PLs earned $46 billion in total revenue, the consultant said. New profitability was 5 percent and net 3PL revenues were $25 billion, Armstrong said.