The 3PL Market Slump Is Over

The 3PL Market Slump Is Over

As the market for third-party logistics improves, manufacturers will see costs begin to rise.

The demand for third-party logistics (3PL) services dropped off dramatically in 2009, as their main customers -- manufacturers and retailers -- had fewer products that needed to be warehoused and transported. After reaching an all-time high of $127 billion in 2008, the market for U.S. 3PLs fell to $107 billion in 2009, according to market research firm Armstrong & Associates.

Part of the reason for the decline was a drop in prices in the face of soft demand last year. If all goes well this year -- early results have seen double-digit improvements in several 3PL market segments -- then the market as a whole could bounce back to $121 billion for 2010, based on Armstrong's estimates. That also means, inevitably, that manufacturers should expect to see pricing for 3PL services start climbing back to previous levels.

See Also:
• Goodbye Big Three, Hello Supply Chain
• The New Supply Chain Agenda

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