Top 50 3PLs: Growth collides with global disruption

From the September-October 2025 edition of Supply Chain Management Review.

September-October 2025

This issue of Supply Chain Management Review explores the technologies, strategies, and leadership practices shaping next-generation supply chains. Features include Gartner’s 2025 Top 25 Supply Chains and an…

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Since President Trump took office, sweeping import tariffs, temporary pauses, and a reassessment of trade exemptions have added significant uncertainty for global businesses and consumers.

The impact is certainly being felt by today’s largest companies that have long-standing trade relationships and supply chains that stretch across multiple countries. “So, when tensions rise, it adds complexity and cost to cross-border trade,” says Herman Guzman-Carranza, logistics and transportation advisor at Accenture.

“Ongoing tariffs and trade wars are likely to slow global economic growth,” says Evan Armstrong, president, Armstrong & Armstrong (A&A), a leading third-party logistics (3PL) advisory firm. “Outcomes will hinge on which businesses and industries secure exemptions. So far, larger, well-capitalized U.S. companies with robust lobbying efforts are likely to fare better than their smaller counterparts.”

Of note, on April 2, President Trump announced changes to the de minimis rules for shipments from China. This will eliminate exemptions from specific tariffs for small shipments, such as those in e-commerce. Given these factors, Armstrong projects 2025 3PL revenue will reach $316.2 billion—a 4.5% increase—driven largely by early-year growth.

Multiplying impacts

Meanwhile, geopolitical tensions, such as trade disruptions caused by the Russia-Ukraine war, Red Sea blockage, and the recent reciprocal tariff announcements, are forcing companies to rethink and redesign their supply chains. Each part of the 3PL business, including transportation, warehousing, and value-added services are facing its own set of challenges amid economic shifts, regulations and evolving consumer demands. 

“Rising costs and inflation are squeezing margins, making it harder for logistics providers to stay profitable,” says Sarah Banks, global lead, freight and logistics, Accenture. “It’s a complex and evolving landscape, and most 3PLs are working closely with their clients to assess the business impact.”

Guzman-Carranza emphasizes how volatile fuel costs, labor shortages, and geopolitical risks are disrupting shipping routes. “Regulatory pressures and infrastructure constraints are also driving up costs,” he says. “Even though tools like AI and route optimization are helping, many tasks are still manual, making it harder to react fast.”

Labor shortages and fierce competition for skilled workforce, especially in warehousing and transport, compounded by pressure to speed up order fulfillment for growing e-commerce demands, continue to remain a key concern to 3PLs.

“This can potentially be made worse by stricter immigration policies,” adds Banks. “At the same time, many ports and rail systems are facing congestion and aging infrastructure, making the movement of goods slower and more unpredictable.”

Warehousing and distribution continue to deal with fluctuating demand for space, as inventory levels keep shifting unpredictably.

The inventory buildup ahead of the Trump-era import tariffs has resulted in 3PL warehouses nearing full capacity, which will take time to draw down. Because of this inventory buildup, air and ocean freight forwarders have seen substantial increases in volumes and revenue.

“Advancements in automation are easing some pressures, but smaller 3PL players struggle to invest in warehouse management systems, AI, and robotics because of the high costs, placing them at a disadvantage as compared to their larger peers,” says Guzman-Carranza. “On top of that, rising operational costs to maintain service levels, real-time inventory visibility, and regulatory compliance are eroding profitability.”

For value-added services, like packaging, demand keeps changing. “Direct impacts are seen where raw material supply is disrupted due to trade uncertainties,” says Guzman-Carranza.

At the same time, 3PLs need to keep up with new rules around sustainability and packaging. “With the rise of omni-channel retail, clients want more personalized and greener packaging, which requires a balance of creativity, efficiency, and environmental responsibility,” adds Guzman-Carranza.

2024 3PL market figures

While no one will know the full impact on the 3PL industry this year, data compiled by A&A for 2024 indicates that the overall 3PL market remained stable after being hit hard in 2023.

According to current estimates from A&A, the net revenues of the U.S. 3PL market in 2024 grew by 1.6% to reach $131.2 billion in 2024, following a decline of 12.8% in 2023. Meanwhile, the gross revenues across all four segments of the 3PL market increased by 1.1% year-over-year, recovering from a significant drop of 26.1% in 2023. “This brings the total value of the U.S. 3PL market to $302.7 billion in 2024,” says Armstrong.

 

International transportation management (ITM)—which encompasses air and ocean freight forwarding, customs brokerage, warehousing, and inland transportation—and domestic transportation management (DTM)—which includes freight brokerage, managed transportation, intermodal transportation management, and last-mile—both experienced significant gross revenue declines in 2023, with double-digit reductions reported.

DTM saw an additional decline of 4.2% in 2024, while ITM experienced a 6.5% increase last year—the most significant year-over-year increase of all 3PL segments.

A&A attributes the growth in the ITM segment to shipping uncertainties in the Red Sea and a decrease in ocean traffic through the Suez Canal as well as concerns regarding tariffs and trade wars—especially in late 2024, as importers were eager to receive their goods before tariff increases.

In contrast, the non-asset-based DTM segment experienced gross and net revenue declines of 4.2% in 2024, or $118.4 billion. Net revenue fell by 2%, reaching $19.2 billion. “Despite this decline, it marked an improvement compared to 2023, which saw double-digit revenue drops,” Armstrong says.

A&A figures indicate that the asset-heavy dedicated contract carriage (DCC) 3PL market saw the second largest year-over-year gross revenue growth in 2024 for all 3PL segments, up 6% to $31.5 billion, and the largest in year-over-year net revenue growth, up 5.3% to $31.2 billion.

“DCC has an advantage when truckload capacity increases due to softer demand and declining rates,” says Armstrong. “Because traditional DCC contracts have one- to three-year terms with specific trucking assets dedicated to customers, this makes DCC contracts much ‘stickier’ than standard shipper/carrier trucking contracts and less susceptible to declines in the truckload spot market.”

The value-added warehousing and distribution (VAWD) market was the third best-performing segment in 2024, growing 2.3% to $69.7 billion in gross revenue. In 2024, VAWD experienced the second-highest net revenue increase among the four 3PL segments, growing by 3.9% to $53.9 billion.

“For VAWD 3PLs, most warehouses are full, and higher interest rates have kept a lid on new warehouse development,” says Armstrong. “There has been increased focus on fine-tuning warehouse pricing and improved bid performance. Shippers see this as a good time to put out RFPs and work to mutualize some of the one-sided agreements entered into during the post-shutdown demand surge.”

Armstrong adds that many shippers are examining their supply chain networks and providers to improve inventory management and on-time delivery performance. “We anticipate a continued focus on supply chain network flexibility and warehouse optimization,” he says.

3PL merger and acquisition activity

In 2024, 18 merger and acquisition (M&A) transactions occurred, including five acquisitions valued at more than $1 billion. “This year has started strong, with eight pending deals for more than $100 million as of January, including DSV’s efforts to acquire DB Schenker,” Armstrong notes.

 The industry is seeing significant consolidation as well. “Large 3PLs are expanding their capabilities, technologies and reach through M&A, affecting both the industry and its customers,” says Banks.

For example, DSV’s acquisition of DB Schenker in 2024 and CMA CGM’s purchase of CEVA Logistics, Ingram Micro, and GEFCO are helping them scale up freight, warehousing, and value-added services and let them invest more in advanced tech like automation, IoT, AI and analytics—which is great for shipper customers.“But there’s also a risk of fewer choices in the market, which could increase prices or limit service options,” says Banks. She predicts that in the future, fewer, but stronger 3PLs are likely to dominate, and smaller firms will survive through specialization.

“Large 3PLs’ tech-driven platforms will likely raise entry barriers, fueling international growth and last-mile improvements,” says Banks. “But while the consolidation unlocks benefits for 3PLs and their customers, 3PLs will not realize these benefits without a clearly defined and well-executed integration strategy that considers customers, culture, and technology.” 

 

In for a landing

Given multiple uncertainties in today’s volatile market, Armstrong advises 3PL customers to compare their current operations against prevailing market prices.

“If their existing pricing for 3PL services, such as warehousing, was established during the peak demand period following the pandemic shutdowns, they should consider reviewing these agreements,” advises Armstrong. “Customers should plan to create an RFP with updated pricing and contract terms well in advance of their contract renewal.”

Investing time in developing a comprehensive dataset of product items, orders, and shipments is crucial in preparing a successful 3PL RFP. “The RFP should be structured to ensure comparable bids, facilitating both the contracting and implementation processes with the 3PL providers,” Armstrong says.

In addition, customers need to assess their domestic and international operations and identify where 3PLs can add value—whether that’s in a specific region, through a certain capability, or both, and more.

“Second, resilience is key,” adds Banks. “Look at your operations. Where can you diversify suppliers, shift inventory, optimize inventory mix, or reinvent inventory management strategies? A strong 3PL partner can help you do that and provide the tools and insights to navigate whatever comes next.”

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