TIA reports strong annual gains for Q4 brokered shipment activity

The most recent edition of the Transportation Intermediaries Association’s (TIA) 3PL Market Report, which covers the fourth quarter and was released this week, showed decent annual growth for key brokered freight transportation metrics. 

This is the 37th 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. And this report represents more than 1.4 million shipments and more than $2.5 billion in total revenue for the third quarter of 2017, according to TIA.

Total third quarter invoice revenue for all TIA member study participants—at around $2.8 billion—was up 17% percent annually, and total shipments—at 1,439,237—increased 7.8%. The average invoice per shipment of $1,951 rose 8.5%, with profit margin percentage down 100 basis points to 14.6 percent.

Key fourth quarter metrics by mode included:

• Truckload: shipments up 7% annually at 989,255, with invoice amount per load up 9.7% at $1,679, profit margin per load up 14.5% at $248, and profit margin percentage up 60 basis points at 14.7%;
• Less-than-truckload: shipments up 14.6% annually at 131,436, invoice amount per load up 9.3% percent at $423, profit margin per load up 10.4% percent at $82, and profit margin percentage up 20 basis points at 19.4%; and
• Intermodal: shipments—at 274,177—were down 3.6% annually, with invoice amount per load up 7.2% at $3,094, and profit margin percentage down 40 basis points at 8.6%

On a sequential basis from the third quarter to the fourth quarter, TIA’s survey data indicated that total shipments rose 0.8% to 1,439,237, total revenue headed up 8.6% to $2,808,478, invoice amount per shipment increased 7.8% to $1,951, and profit margin percentage fell by 90 basis points to 14.6%.

“The market really seems to be in a decent place,” said Tom Malloy, TIA vice president of membership, in an interview. “The truckload segment represents the lion’s share of margin improvement annually for the fourth quarter at 14.5%, which is impressive. That is a big deal, as is the relative flatness of intermodal, too.”

Malloy said that the 17% annual increase in total revenue did somewhat stand out from other metrics, adding that it bodes well for 3PLs.

“3PLs are not asset-based so when they are seeing the uptick that means that carriers loads are largely moving through a 3PL,” he said. “Seeing that uptick means that more 3PLs are involved in the securing of these interline transportation services. It also means they are doing a better job overall and are able to offer capacity from multiple carriers and expand their service portfolio.”

On an anecdotal basis, Malloy said business activity seemed to be a little bit flatter in the first quarter of this year.

One finding separate from the aforementioned data was a question asking TIA members if ELD are starting to have an impact on their truckload or drayage businesses, on a ranking of 1-5, with 5 being the highest.

Nearly 45% of respondents said ELD were having an impact. Malloy said that was telling on the drayage side, as drayage has a lot of flexibility compared to traditional over the road trucking.