Q2 TIA benchmarking report shows mixed annual results

Total brokered freight transportation shipments, total revenue, and invoice per shipment data for various modes were largely mixed, according to the “Second Quarter 2016 TIA 3PL Benchmarking Report, which was recently issued by the Transportation Intermediaries Association (TIA).   

This is the 30th edition of this report, which is based on monthly data from TIA member companies who submit real operating data and respond to questions on business conditions impacting the 3PL sector.

Types of questions that the member companies’ answers include: number of shipments by mode, total billing, and gross margins. Other data collected are customer-based forecasts to offer up expectations of near-term business volume.

Total second quarter invoice revenue for all TIA member study participants—at around $2.12 billion—was down 8.3 percent annually, and total shipments—at 1,283,929—increased 0.7 percent. The average invoice per shipment of $1,652 fell 8.9 percent, with profit margin percentage up 150 basis points to 16.0 percent.

Key second quarter metrics by mode included: 
- Truckload: shipments up 1.1 percent annually at 864,176, with invoice amount per load down 10.3 percent at $1,416, profit margin per load flat at $235, and profit margin percentage up 170 basis points at 16.6 percent; 
-Less-than-truckload: shipments down 4.8 percent annually at 121,532; invoice amount per load down 4.7 percent at $377, profit margin per load up 3.1 percent at $74, and profit margin percentage up 150 basis points at 19.7 percent; and
-Intermodal: shipments—at 255,908—were down 2.1 percent annually, with invoice amount per load down 13.1 percent at $2,099, and profit margin percentage down 20 basis points at 10.0 percent

While annual output and revenue by mode was largely down, things looked somewhat better on a sequential basis for the second quarter when compared to the first quarter of 2016. Total brokered freight shipments, paced by truckload’s 6.2 percent sequential increase, rose 7.0 percent to 1,283,929, and total revenue at around $2.1 billion was up 6.8 percent. Invoice amount per shipment fell 0.2 percent to $1,652 and profit margin was off 10 basis points to 16.0 percent.

The annual declines in both shipments and invoice amount per load continue to reflect what is considered by many industry stakeholders as a soft market, which has been the case through most of 2015, due to many factors, including: still-high inventory levels; supply chain shifts due to the impact of e-commerce on supply chains; changes in buying and purchasing habits by consumers; excess over the road capacity, and lackluster demand, among others.

In a recent interview, Mark Christos, member of the TIA Board of Directors, Chair of the TIA 3PL Market Report, and vice president at Matson Logistics, noted that when looking at this data, it is clear that over all freight demand remains soft, while capacity remains plentiful, and fuel costs remain low (although they have shown strong gains over the last two weeks).