Ranking the Top 50 Third-Party Logistics Providers of 2024

Last year proved to be challenging for third-party logistics (3PLs) providers. Transportation rates plummeted, fuel prices skyrocketed, retaining and attracting talent became difficult, warehouse space tightened, rules and regulations increased, competition surged, and the supply chain faced frequent disruptions. Meanwhile, shippers focused heavily on right-sizing bloated inventories and reducing logistics costs.

London-based Transport Intelligence's (Ti) State of Logistics Survey 2024 shows that the three most important challenges currently affecting the 3PL industry are the economic downturn, increased costs, and increasing competition.

“This marks somewhat of a difference compared to when we ran this survey last year, where increased costs were voted the most important challenge for the 3PL market at the time,” says Nia Hudson, Ti Research Analyst. “Concerns surrounding the economy and its effect on the 3PL market have clearly grown in the past year amid a very challenging economic environment.”

The leading U.S. 3PL consultancy, Armstrong & Armstrong (A&A), points to the rise in central bank policy rates to fight inflation as continuing to weigh on 3PLs and pressure margins.

Meanwhile, the Transportation Intermediaries Association (TIA) reports that 3PLs saw a 4.7% decline in shipments during the fourth quarter of 2023, a 4.3% decrease in invoice amount per shipment, and an 8.8% drop in total revenue compared to the third quarter of 2023. “Average gross margin percentage during the fourth quarter stood at 15.6%, up slightly on a quarter-to-quarter basis, but still well below year-ago levels,” said TIA analysts.

Meanwhile, the influx of new players in the e-commerce fulfillment space has triggered a race to the bottom in pricing. “As a result, 3PLs are compelled to offer competitive rates to attract and retain clients,” says Sai Kiran Balaji, lead analyst of logistics research at Mordor Intelligence. “For instance, Amazon’s transparent fee structure empowers sellers to estimate their costs and potential profits accurately.”

Additionally, Amazon’s multi-channel fulfillment allows sellers to fulfill orders from various sales channels using their inventory stored in Amazon’s centers. “To keep up, 3PLs must invest more in meeting these demands while safeguarding their customer base,” says Balaji. “They must also explore innovative pricing strategies and value-added services to differentiate themselves from the competition.”

Armstrong & Associates Top 50 U.S. 3PLs

(Largest U.S. 3PLs Ranked by 2023 Logistics Gross Revenue/Turnover)

Armstrong & Associates Top 50 Global 3PLs

(Largest U.S. 3PLs Ranked by 2023 Logistics Gross Revenue/Turnover)

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