Logistics Industry Continues to See Declines as the Supply Chain Market Corrects Itself From Pandemic Highs
The Transportation Intermediaries Association (TIA) – the only organization exclusively representing transportation intermediaries of all disciplines doing business in domestic and international commerce – has released its latest 3PL Market Report for the first quarter of 2024. This report highlights the continued struggles for the 3PL industry as it showcases a decline in shipments, invoice amount per shipment, and total revenue compared to the fourth quarter of 2023.
The report outlines a decline across the board since last quarter. Total shipments experienced a 3.7 percent quarter-over-quarter (QoQ) decrease and an 8.9 percent year- over-year (YoY) decline. The invoice amount per shipment dropped by 4.4 percent QoQ and showed a 13.8 percent YoY decrease. Total revenue witnessed an 0.8 percent QoQ decline and a substantial 21.4 percent YoY decrease. The gross margin decreased by 60 basis points compared to the third quarter, and it experienced a significant YoY decline.
“Overall volumes in Q124 being down from Q123 is not a surprise given the market dynamics, but there are encouraging signs,” said TIA Chairman of the Board Mark Christos from SolvLogix Inc in Oak Brook, Ill. “Truckload and Intermodal volume was down, but had its best performance in the last four quarters. Compared to Q423, Truckload and LTL volume increased and that is an encouraging sign for any Q1 volume to exceed a Q4.”
Key Takeaways:
Participant Size Summary: Smaller brokers surpassed their larger peers in quarter-to-quarter performance regarding invoice amount per load, however medium sized brokers won the day in terms of gross margin.
Mode Comparison: Invoice dollars and invoice amounts per load decreased in all modes, but there was an improvement in the total shipments across Truckload and LTL, however there was still a decrease in gross margin across all modes.
Total Activity YoY: Brokers’ key performance indicators showed a universal decline year-over-year in the first quarter of 2024. Shipments were the most resilient, relatively speaking, but still experienced a nearly 9 percent decline compared to the previous year. Revenue decreased by over 21 percent, and the amount invoiced per shipment was down by almost 14 percent. The year-over-year margin comparison in Q124 was significantly weaker.
“While we continue to see some decline, this is not surprising in the first quarter as first quarters annually are slower given the winter season,” said Anne Reinke, president & CEO of TIA. “While our current view of the market has not changed dramatically, we are still positive as we head into quarters 2 and 3, which historically are busier. Plus, as we have predicted for some time now, the market is correcting itself from the unbelievable highs of the pandemic. It will be a while before the economic correction settles down.”
The full report “3PL Market Report, First Quarter 2024, Issue 62” is available for free to media upon request.
Please note: The 3PL Market Report is intended for TIA subscribers and the full report is not meant to be reproduced or redistributed by any recipients.
About TIA:
The Transportation Intermediaries Association (TIA) is the professional organization of the $343 billion third-party logistics industry. TIA is the only organization exclusively representing transportation intermediaries of all disciplines doing business in domestic and international commerce. TIA is the voice of transportation intermediaries to shippers, carriers, government officials, and international organizations. Learn more about TIA at www.tianet.org.
