Declining Oil prices, Fluctuating Currency Hold Back Growth for 3PLs in Second Quarter 2015

The 3PL market has shown negative growth in the second quarter of 2015 mainly because of the declining reporting currency of the 3PLs. Below is the list of y-o-y comparison of various currencies in which the 3PLs report their revenues.

Reporting Currency Y-O-Y Decline %
Danish Krone -19.4%
Euro -19.4%
Kuwait Dollars -6.7%
South Korean Won -6.1%
Swizz Franc -5.6%
Yen -15.7%

ARC Advisory Group (Logistics Viewpoints) tracks the quarterly revenue results of the most prominent publicly traded 3PLs on an ongoing basis. The report is published after all the companies on the list release their revenues. The off cycle earnings results by some large 3PLs is why we are reporting about 2Q 2015 revenues in June.

For this financial analysis, the scope of coverage includes non-asset based transportation and warehousing services (referred to as “contract logistics” in Europe):

  • Non-asset based domestic transportation services (brokerage and managed transportation services)
  • Non-asset based international transportation services (freight for-warding and customs services)
  • Warehousing services (warehousing and associated services such as packaging, light assembly, sequencing goods for a factory line)

 

The table below lists the three segments their y-o-y growth and the contribution (in %) to overall market.

 

Business Segment Contribution to the total market Y-O-Y Decline
Domestic 17.3% -5.0%
International 52.8% -10.2%
Contract 29.9% -6.4%

The 2Q15 revenues across the public firms covered in this analysis has declined by 8.2 percent year over year with four of seventeen (Sinotrans report revenues biannually ) 3PLs recording growth in revenues.  High flyers, based on year over year growth, include:

  • Expeditors International of Washington, up 5.8 percent
  • Norbert Dentressangle, up 5.8 percent
  • JBHunt, up 3.8 percent
  • C.H. Robinson Worldwide, up 1.2 percent

Companies witnessing decline in year over year revenues include:

  • DSV, down 16.5 percent
  • Panalpina, down 16.9 percent
  • UTi Worldwide down 16.5 percent
  • DHL Supply Chain and Global Forwarding, down 13.1 percentThe table below lists the 2nd Quarter FY15 performance of the top eighteen publicly traded 3PLS.

Remember, based on our definition, we are excluding asset-based transportation revenues from, DHL, DSV, J B Hunt and Norbert Dentressangle.  Some 3PLs have revenues not associated with traditional 3PL activities and those revenues are also excluded.

Supplier 2nd Qtr 2Q14($M) 2nd Qtr 2Q15 ($M) YoY % Change YTD 1H14 ($M) YTD 1H15 ($M) YoY % Change  
Agility $1,099.0 $983.0 -10.6% $2,114.3 $1,936.7 -8.4%
C.H. Robinson Worldwide $3,502.9 $3,545.1 1.2% $6,645.5 $6,846.0 3.0%
CEVA Logistics $1,978.0 $1,763.0 -10.9% $3,843.0 $3,539.0 -7.9%
DHL Supply Chain and Global Forwarding $9,952.9 $8,652.4 -13.1% $19,585.0 $17,378.0 -11.3%
DSV $2,129.5 $1,778.2 -16.5% $4,158.2 $3,528.7 -15.1%
Expeditors International of Washington $1,599.1 $1,691.6 5.8% $3,090.8 $3,369.1 9.0%
Hitachi (1Q ends in June) $1,577.6 $1,399.0 -11.3%
Hyundai GLOVIS $3,363.3 $3,295.0 -2.0% $6,352.0 $6,306.9 -0.7%
JBHunt $521.0 $541.0 3.8% $1,006.0 $1,049.0 4.3%
Kuehne + Nagel $5,110.5 $4,616.1 -9.7% $9,900.1 $9,183.4 -7.2%
Logwin $206.2 $185.5 -10.1% $413.6 $379.7 -8.2%
Menlo/Conway $1,538.3 $1,465.4 -4.7% $2,856.8 $2,796.3 -2.1%
Norbert Dentressangle $803.8 $850.5 5.8% $1,423.2 $1,631.6 14.6%
Panalpina $1,838.2 $1,527.5 -16.9% $3,559.6 $3,315.9
Ryder $741.4 $737.2 -0.6% $1,451.1 $1,430.9 -1.4%
*Sinotrans $3,188.4 $3,425.2 7.4%
UPS Supply Chain Solutions $2,348.0 $2,242.0 -4.5% $4,512.0 $4,435.0 -1.7%
Uti Worldwide (2Q ends in July) $1,094.0 $913.8 -16.5% $2,138.0 $1,887.1 -11.7%
Total $39,403.8 $36,186.3 -8.2% $76,237.7 $72,438.6 -5.0%  

 

If you would like a complete copy of this analysis, including the results of the eighteen 3PLs covered, please contact chanf@arcweb.com.

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