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Wednesday, August 20, 2014

3PL CEOs Bullish on Business in North America

North American CEOs of third-party logistics providers (3PLs) are forecasting significantly higher revenues over the next three years than their counterparts in Europe and Asia-Pacific.

According to a survey released at the Annual Global Conference of the Council of Supply Chain Management Professionals earlier this week in Denver, North American CEOs expect revenues to increase by an average 14.6 percent during the period. European CEOs predict revenue growth of 10.3 percent, while chief executives in Asia-Pacific anticipate 11.6 percent gains.

Credit: sritangphoto at

Credit: sritangphoto at

The research, titled 20th Annual Survey of Third-Party Logistics Providers, also finds that North American CEOs expect higher regional revenue growth in the next three years compared with CEO expectations in Europe and Asia-Pacific. Forecasts call for an 8.3 percent gain in North America versus 5.9 percent in Europe and 8 percent in Asia-Pacific.

The survey was co-authored by Robert Lieb, professor of supply chain management at Northeastern University, and his daughter Kristin Lieb, an associate professor of marketing communications at Emerson College, both in Boston. Penske Logistics sponsored the work.

The outlook for revenue growth follows a year (2012) in which a little more than half (52 percent) of the companies surveyed met or exceeded revenue projections — a 17.5 percent decline from 2011. The reasons for the drop-off include instability in Eurozone economies and the migration of some manufacturing from China.

RELATED: Study Cites Need for IT Enhancement by 3PLs

Nevertheless, more than two-thirds of 3PLs surveyed were profitable last year. Revenue opportunities, moreover, are seen in Eastern Europe and Russia, as well as from domestic growth in China.

China’s slight weakening in manufacturing due to rising wages, overcapacity, and reshoring and nearshoring to North America affected 3PL revenue, as well. A sizable majority (87 percent) of North American CEOs provided third-party logistics services in Mexico — a nearshoring target — which represented an average 9.3 percent of revenues for them last year. Revenues in Mexico are expected to be 12.5 percent of all revenue in three years, respondents said.

The survey is based on responses from 34 third-party logistics CEOs in North America, Europe, and Asia-Pacific, whose companies generated a combined $50 billion in revenue in 2012.


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