According to TIA survey: 3PL revenues increased by more than 10% quarter over quarter
The Transportation Intermediaries Association’s third quarter report paints a picture of a 3PL industry that has had a strong three-month run, whether that is a comparison to the second quarter of this year or the corresponding quarter of 2020.
Total shipments for participants surveyed by TIA in all modes – full load, LTL and intermodal – increased 6.8% in the third quarter from the second. Total revenue increased 10.3% from the second quarter, and the invoice amount per shipment increased 3.3% from $ 2,419 to $ 2,419.
Gross margin for the entire 3PL industry range studied by TIA increased to 13.4% from 12.8% in the second quarter.
The TIA report also breaks down its data based on the size of survey participants. He saw a significant change between Q2 and Q3 for the smallest of the 3PLs surveyed, those with annual revenue of less than $ 16 million.
“Capacity attraction issues hurt smaller brokers the most,” TIA said in its report. “They reacted by focusing on the most attractive loads.
For 3PLs in this smaller category, third quarter shipments were down 10.3% from the second quarter. But the size of the average invoice increased by 19.5% and the total turnover by 7.2%. Margins, however, were a tiny 1.2%.
In contrast, the mid-range 3PLs’ margin – between $ 16 million and $ 100 million – stood at 9.4% on a shipping volume that grew only 2.6%. Turnover increased by 7.1% and the average invoice amount increased by 4.5%.
The largest companies, those with revenues over $ 100 million, saw their average invoice amounts drop 0.5% from the second quarter. Total shipments increased 7.5% and revenue increased 10.7%. But with a gross margin of 4.3%, the largest companies had the lowest of the three categories studied by TIA.
What is particularly striking in the margin data is how the red ink turned black between the second and third quarters. In TIA’s second quarter report, the 3PL midsection margin was reported to be negative at 4.4%. For companies with revenues over $ 100 million, it was a negative 9.7%. Smaller companies posted a positive margin of 6.9% in the second quarter.
In contrast, in the third quarter, the smallest companies had the tightest margins and the margins of the other two categories were solidly positive.
There was a significant divergence during the quarter between modes of transportation. Freight traded by truck had a good quarter, with total shipments up 9.5% and bill per load up 5% to $ 2,410. The full truckload gross margin was 13.7%, up 90 basis points from the second quarter.
During the quarter, 3PL-traded LTL shipments were down 2.5% from the second quarter of last year, to 130,886. However, the bill per load rose 7.5% to $ 465. and gross margin per load increased 13.5% to $ 97. The gross margin was 20.9%, an increase of 110 basis points.
Intermodal freight handled by the 3PLs clearly experienced difficulties. Total shipments were down 1.3%, the invoice amount per load only increased 1.2% to $ 2,685 and the gross margin remained stable at 8.8%.
While many statistics from economists have mostly ignored comparisons with the corresponding periods of 2020 due to the pandemic, comparisons in trucking are now relative to the third quarter of 2020, when a freight market solid was in full swing. The FreightWaves outbound bid rejection index for the third quarter of last year rose steadily throughout the quarter, peaking at 26.88. By comparison, OTRI for the third quarter of this year started at less than that number and ended the quarter at 21.78.
Given that the third quarter of 2020 was relatively strong, the performance of the 3PL industry in the third quarter of 2021 was notable in comparison. Total shipments for the third quarter of this year increased 10.6% from last year; total revenue increased 36.1% and gross margin increased 130 basis points. The invoice amount per shipment increased by 23% compared to last year.
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