Third party logistics providers (3PLs) in the automotive industry have seen their year-on-year revenues decline by 37.5% in the first quarter in the US, according to a new survey released by supply chain consultancy Armstrong and Associates.
The figures from the automotive vertical have helped to bring general revenues for 3PLs across all industries down by 6.7% year-on-year. Armstrong reports that, if automotive logistics were removed from the list, overall 3PL business may actually be up.
The report suggests that 3PLs with high exposure to automotive are suffering at least in line with their customers. Total sales of domestic and imported sales are down 35% the first three months of the year, while North American production has been cut 50%.
The survey canvassed 30 3PL executives with cumulative revenues of more than $40 billion and found that 53% of those involved said revenues were down, while 37% saw revenues increasing through new business.
Armstrong reports that while results are mixed, 3PLs in general should recover quickly, with non-asset based players being particularly resilient.
However, that resilience is likely to depend on the strength of investment 3PLs are able to maintain during the downturn.
Jon Langenfeld, Senior Research Analyst at R.W. Baird, told Automotive Logistics that the current environment is likely to see a polarisation in the market. “I think what happens in environments like these is we see the stronger providers get stronger and the weaker get weaker. The dispersion between the top level 3PLs and the lower 3PLs becomes greater.”