After holding their own for most of 2008, third-party logistics revenues plummeted in December and have remained depressed to start 2009, according to a report by Armstrong & Associates, a supply chain market research and consulting firm specializing in 3PL market research.

"Our recent survey and analysis shows gross revenue (turnover) for 3PLs down by 8.8% for 2009," the report said. "Net revenues (gross margins) were less impacted for many non-asset transportation managers and leading value-added warehousing 3PLs."

Expeditors, C.H. Robinson, Kuehne + Nagel and other major transportation managers report net revenues decreased 3% to 10%. Earnings before interest, tax, depreciation and amortization (EBITDAs) and earnings before interest and tax (EBITs) fell proportionately, the report said, adding that net revenues are expected to drop another 5% this year.

Sixty percent of 3PLs as a group reported lower gross and net revenues this year while 57% of value-added warehousing 3PLs report increased net revenues. The food and grocery verticals and 3PL returns management subsegment are up for 2009, but automotive and retail verticals are expecting 32% and 23% drops, respectively.

The expected results for 2009 are showing declines as well, with domestic transportation management forecasting a minus 10% to 2% gross revenue range; international transportation management coming in at minus 12% to 2%; and dedicated contract carriage at minus 9% to 1%

"We estimate that 2009 will be the first recorded negative year in 3PL gross revenue growth since we started tracking it in 1996," the report said.

The report labels 2008 as "lackluster" in the U.S. Gross revenues for third-party logistics grew 6.7% with net revenues up 4.7% as compared to 7.2% in 2007. Net income increased only 1.5% and was 5.3% of net revenue, the report said, with overall growth and the net profit ratio at 94.7, the weakest since Armstrong & Associates began tracking the information in 1996.

The complete report is available from Armstrong & Associates online at www.3PLogistics.com.