State of the 3PL Market: Technology now the key differentiator
Following last year’s merger and acquisition frenzy, the speed of technology implementation by the new “mega 3PLs” will need to keep pace with the evolving challenges of omni-channel fulfillment. Those providers that meet shipper needs will remain dominant.
The merger and acquisition frenzy of 2015 may have abated a bit over the past few months, but the trend for larger third-party logistics providers (3PLs) to consolidate could be played out for some time, contend leading industry analysts.
Since early 2014, there have been 10 major acquisitions by 3PLs totaling $18 billion due to the need to expand the array of services and extend their geographic footprints in order to drive scale. In the wake of this activity, there are over 30 domestic 3PLs that have revenue exceeding $1 billion.
“The pace of 3PL merger and acquisition will certainly continue,” says Evan Armstrong, president of the third-party logistics consultancy Armstrong & Associates. “In fact, this year we expect to see a large number of mid and small-sized deals versus the $100-million-plus deals seen throughout 2015.”
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The merger and acquisition frenzy of 2015 may have abated a bit over the past few months, but the trend for larger third-party logistics providers (3PLs) to consolidate could be played out for some time, contend leading industry analysts.
Since early 2014, there have been 10 major acquisitions by 3PLs totaling $18 billion due to the need to expand the array of services and extend their geographic footprints in order to drive scale. In the wake of this activity, there are over 30 domestic 3PLs that have revenue exceeding $1 billion.
“The pace of 3PL merger and acquisition will certainly continue,” says Evan Armstrong, president of the third-party logistics consultancy Armstrong & Associates. “In fact, this year we expect to see a large number of mid and small-sized deals versus the $100-million-plus deals seen throughout 2015.”
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About the Author
Patrick Burnson, Executive Editor Mr. Burnson is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected].Subscribe to Supply Chain Management Review Magazine!
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