The third-party logistics (3PL) landscape experienced a decline in shipments, invoice amount per shipment, and total revenue compared to the previous quarter, according to a new study released by Transportation Intermediaries Association (TIA).
Specifically, total shipments saw a 4.7% quarter-over-quarter decrease and an 8.9% year-over-year decline. Invoice amounts per shipment and total revenue also faced significant drops, indicating that the fourth quarter was the toughest of 2023.
“The market is tough for brokers and intermediaries, as our Q4 Market Report revealed,” says Anne Reinke, TIA president and CEO. “Despite headwinds, TIA members are serving their customers effectively and efficiently, investing in their businesses, and are beginning to see some positive trends in the marketplace.”
Key takeaways:
- While the overall volume and revenue metrics indicate a downturn, the report highlights the sector's resilience. Larger brokers have notably outperformed their smaller counterparts in terms of invoice amount per load and gross margin, suggesting a slight overall enhancement in market conditions.
- There's a noteworthy improvement in the invoice amount per load for both truckload (TL) and less than truckload (LTL) segments, hinting at a gradual recovery in the transportation cost. This recovery is crucial for stabilizing the market and offering some relief to 3PL providers facing tight margins and decreased volumes.
- Despite the challenging year, the fourth quarter showcased the best performance in 2023, signaling potential for recovery and growth.
- The report also sheds light on the significant decline experienced by the TL segment compared to others, with intermodal facing the most considerable drop in invoice amount per load and total revenue. However, the resilience in the LTL segment, showcasing improvements in invoice amount per load similar to the third quarter, suggests varied impacts across different modes of transportation.
“While 2023 has been a challenging year for the 3PL sector, with the fourth quarter being particularly tough, there are emerging signs of a turnaround,” says Mark Christos, TIA chairman of the board. “The industry's ability to remain flexible and responsive to changing market conditions will be crucial in overcoming current challenges and seizing future opportunities.”
