2013 Top 50 Global & Domestic Third-Party Logistics Providers

Finding the right third-party logistics provider (3PL) always involves considerable due diligence - it may also mean leaving an existing partner for a set of collaborators that can deliver on the promise of a seamless global network.

Leading industry analysts and consultants maintain that the landscape for global and domestic 3PLs may be shifting this year, but shippers can hedge their bets by vetting asset-based and non-asset players when planning future networks.

A healthy service provider portfolio, say our analysts, includes a bit of both.

In fact, this year’s list of Top 50 Global 3PLs, compiled by market consultancy Armstrong & Associates, validates the observation that shippers need a variety of options when it comes to moving freight this year.

“Shippers would prefer to work with a few providers, but the performance scale of operations often requires them to hire several 3PLs in order to optimize global procurement,” says Evan Armstrong, the consultancy’s president. “In the domestic arena, it’s more centralized.”

On the domestic front, both Coyote Logistics and XPO Logistics have broken the $2 billion revenue barrier through acquisition, creating two “mega” freight brokers to rival 3PL domestic transportation management (DTM) market segment leader C.H. Robinson Worldwide.

“With other major competitors such as Total Quality Logistics and Echo Global Logistics growing rapidly as well, this intense competition will continue to heat up,” says Armstrong. “In the end, it will mean increased operational performance levels for shippers and further consolidation within the small freight broker ranks.”

While the 3.5 percent year-over-year U.S. 3PL market growth in 2013 was sluggish, mirroring the overall economy, DTM led all 3PL market segments again in 2013, according to Armstrong’s research. Gross revenues were up, as was the cost of purchasing transportation capacity. However, the ongoing driver shortage continues to pressure DTM gross margins and net revenue growth.

“Amazon Effect”

Evan Armstrong

Since 2011, Armstrong and his team have been monitoring the “Amazon Effect” on the third-party logistics market as part of its strategy consulting work.

Related: What is the Amazon Effect?

They’re finding that it’s becoming increasingly important for value-added warehousing and distribution-centric 3PLs with significant business in the retailing industry to anticipate continued growth by Amazon and position—or reposition—their companies within the market as more business shifts from brick-and-motor stores to internet order fulfillment operations.

“International transportation management (ITM) saw another slow-growth year. Expeditors International, Kuehne + Nagel, and Panalpina all had year-over-year revenue gains of 2.9 percent or less,” Armstrong observes. He also notes that more focus in Asia has been on building reliable regional value-added warehousing and distribution (VAWD) networks versus export activity.

Armstrong & Associates Top 50 Global 3PLs

2013 Gross Logistics Revenue (USD Millions)*
Third-Party Logistics Provider
  1. $31,432
    DHL Supply Chain & Global Forwarding
  2. $22,587
    Kuehne + Nagel
  3. $19,732
    DB Schenker Logistics
  4. $17,317
    Nippon Express
  5. $12,752
    C.H. Robinson Worldwide
  6. $8,517
    CEVA Logistics
  7. $8,140
  8. $7,738
  9. $7,293
  10. $7,263
    SDV (Bolloré Group)
  11. $6,627
  12. $6,266
    Toll Holdings
  13. $6,080
    Expeditors International of Washington
  14. $5,828
  15. $5,492
    UPS Supply Chain Solutions
  16. $5,300
  17. $5,224
    J.B. Hunt (JBI, DCS & ICS)
  18. $4,441
    UTi Worldwide
  19. $4,415
  20. $4,042
    Yusen Logistics
  21. $3,923
    IMPERIAL Logistics
  22. $3,433
    Hellmann Worldwide Logistics
  23. $3,374
    Unyson Logistic
  24. $3,212
  25. $3,119
    Burris Logistics
  26. $2,850
    Schneider Logistics & Dedicated
  27. $2,782
    Norbert Dentressangle
  28. $2,718
    Kintetsu World Express
  29. $2,575
    Kerry Logistics
  30. $2,546
    Pantos Logistics
  31. $2,293
  32. $2,280
    Ryder Supply Chain Solutions
  33. $2,090
    FIEGE Group
  34. $2,000
    Coyote Logistics**
  35. $2,000
    XPO Logistics**
  36. $1,900
    BDP International
  37. $1,745
    NNR Global Logistics
  38. $1,695
  39. $1,621
    Total Quality Logistics
  40. $1,611
  41. $1,555
    Nissin Corporation/Nissin Group
  42. $1,586
    APL Logistics
  43. $1,580
  44. $1,540
    Menlo Worldwide Logistics
  45. $1,509
  46. $1,470
    BLG Logistics Group
  47. $1,400
  48. $1,387
    FedEx Supply Chain/FedEx Trade Networks
  49. $1,301
  50. $1,290
*Revenues are company reported or Armstrong & Associates, Inc. estimates and have been converted to USD using the average exchange rate in order to make non-currency related growth comparisons. **34 & 35 Tied.

“This has benefited Kerry Logistics and Toll Holdings who have significant operating networks in China and Southeast Asia,” says Armstrong. “As a sign of this shift, Kerry Logistics, the leading VAWD 3PL in Greater China, was spun off from its parent Kerry Properties Limited via an initial public offering in December 2013.”

Armstrong & Associates Top 50 U.S. Domestic 3PLs

2013 Gross Logistics Revenue (USD Millions)*
Third-Party Logistics Provider
  1. $12,752
    C.H. Robinson Worldwide
  2. $6,080
    Expeditors International of Washington
  3. $5,492
    UPS Supply Chain Solutions
  4. $5,224
    J.B. Hunt (JBI, DCS & ICS)
  5. $5,046
    Kuehne + Nagel (The Americas)
  6. $4,600
    Exel (DHL Supply Chain - Americas)
  7. $4,441
    UTi Worldwide
  8. $3,374
    Unyson Logistic
  9. $3,119
    Burris Logistics
  10. $2,850
    Schneider Logistics & Dedicated
  11. $2,838
    DB Schenker Logistics
  12. $2,641
    CEVA Logistics (The Americas)
  13. $2,280
    Ryder Supply Chain Solutions
  14. $2,188
    Panalpina (The Americas)
  15. $2,000
    Coyote Logistics**
  16. $2,000
    XPO Logistics**
  17. $1,900
    BDP International
  18. $1,621
    Total Quality Logistics
  19. $1,580
  20. $1,540
    Menlo Worldwide Logistics
  21. $1,509
  22. $1,400
  23. $1,387
    FedEx Trade Networks/FedEx Supply Chain Services
  24. $1,301
  25. $1,290
  26. $1,200
    Cardinal Logistics Management
  27. $1,189
    Swift Transportation
  28. $1,138
    Werner Enterprises Dedicated & Logistics
  29. $1,091
  30. $1,007
    Damco (The Americas)
  31. $1,000
  32. $993
    APL Logistics (The Americas)
  33. $968
    Penske Logistics
  34. $884
    Echo Global Logistics
  35. $821
    Yusen Logistics (Americas)
  36. $807
  37. $803
    Transportation Insight
  38. $800
    Jacobson Companies**
  39. $800
    Neovia Logistics Services**
  40. $798
    England Logistics
  41. $795
    Agility (The Americas)
  42. $755
    ModusLink Global Solutions
  43. $734
    Ingram Micro Logistics
  44. $721
    Hellmann Worldwide Logistics (The Americas)
  45. $648
    New Breed Logistics
  46. $615
    U.S. Xpress Enterprises
  47. $580
    Kenco Logistic Services
  48. $574
    Crane Worldwide Logistics**
  49. $574
  50. $570
    DSV (The Americas)
*Revenues are company reported or Armstrong & Associates, Inc. estimates and have been converted to USD using the average exchange rate in order to make non-currency related growth comparisons. **15 & 16, 38 & 39, 48 & 49 Tied.

Armstrong says that while the internet services and retailing 3PL market sub-segment is only a small portion of the Fortune 1000 domestic spend with 3PLs, it has grown 140 percent from 2007 to 2013.

“Amazon is the 800-pound gorilla in the e-retail market, and as it deploys its own local delivery fleets and continues to expand its value-added warehousing and distribution network, it will drive strategic change,” says Armstrong. “Those 3PLs that could be most affected include DHL Supply Chain & Global Forwarding, FedEx SupplyChain, GENCO, OHL, UPS Supply Chain Solutions, and the smaller e-commerce fulfillment niche players like eBay Enterprise (formerly GSI Commerce) and Innotrac.”

While Amazon outsources very few functions to 3PLs, Menlo Worldwide Logistics has been a key beneficiary from Amazon’s growth, having significant portions of business awarded to it in 2013, he adds. “It’s this kind of resiliency that will be a key differentiator in the 3PL marketplace moving forward.”

Balancing Act

John Langley

Resiliency and balance are not mutually exclusive qualities, maintains John Langley Jr., Ph.D., at the Pennsylvania State University. Indeed he argues that the Armstrong rankings reflect more global diversity of gross revenue, thereby challenging the “80-20 Rule.” Also known as “The Pareto principle,” it states that roughly 80 percent of the effects come from 20 percent of the causes.

“This translates into the way the economy is functioning now, with non-asset based 3PLs having much greater leverage for buying asset-based services,” says Langley.

He also observes that domestic trucking supply and demand drives a lot of pricing pressure these days, which encourages logistics managers to spread their business around. “Asset-based providers are having a resurgence,” says Langely. “At the end of the day, someone has to own the assets, and we see them now dealing more directly with retail and Fortune 500 shippers.”

Related: 2013 Third-Party Logistics Study (or 2014 Third-Party Logistics Study)

Adrian Gonzalez

Adrian Gonzalez, the founder and president of Adelante SCM, a peer-to-peer networking community for logistics professionals, agrees that a balanced transport portfolio is ideal. “Logistics managers are trying to mitigate risk by using asset-based carriers for dedicated fleet control operations,” he says. “This is not only true in the truckload segment, but also in intermodal. Shippers have to weigh the benefits of flexibility against the advantages of having predictable routes.”

Non-asset based players resemble “technology providers,” more than ever, Gonzalez adds, noting that increased focus on customer relationship management is redefining the 3PL arena.

“Not just regionally, or domestically, but all around the world, he says. “While someone has to own the physical assets, many 3PLs are becoming much more reliant on cloud computing to provide seamless transparency for the shipper. Asset-based giants are also realizing the advantages of adapting to new IT technologies.”

Gonzalez maintains that through the years, service providers and software vendors have “busted out of their boxes” via mergers and acquisitions, new business models, and new product development to pursue new growth opportunities, and to provide manufacturers and retailers with more complete “end-to-end” supply chain solutions.

“In the past, you had a box for freight forwarder, a box for broker, a box for warehouse operator, and so on,” Gonzalez says. “At the same time, logistics managers had a box for parcel shipping solution, a box for fleet management application, and a box for outbound transportation solution.” Today, he says, the boxes and labels of yesterday are giving way to a single amorphous category: providers of supply chain software and services.

“A logistics service provider can offer its own transportation management system while still being a 3PL and software vendor,” says Gonzalez. “It can also be a B2B connectivity service that facilitates the exchange of data, documents, and other information with carriers and other trading partners.”

Those distinctions, he argues, are becoming less important. For Gonzalez, the only question that still matters is the first one manufacturers and retailers must ask themselves when defining their supply chain strategies and initiatives: What are our desired outcomes?

Magic Quadrant

Greg Aimi

Analysts for The Gartner Group are more concrete when it comes to defining the role of the 3PL. For them, the logistics service provider (LSP) predominantly operates a business that moves, stores, or manages products or materials on behalf of a shipper without ever taking ownership of such products or materials.

In its annual Magic Quadrant for Global Third-Party Logistics report, Gartner considers 3PLs and LSPs to be synonymous. “Increasingly, 3PLs have extended their services beyond the basics, providing opportunities to increase their value and resolve additional customer supply chain challenges,” says Greg Aimi, Gartner’s director of supply chain research and Magic Quadrant co-author.

For example, these services include returns and repair processing, assembly and kitting, packaging, postponement, shipment consolidation, and cross-docking. In some cases, 3PLs also offer fourth-party logistics provider (4PL) or lead logistics provider (LLP) services. Customers use 4PL/LLP as a single management team to oversee and coordinate other 3PLs and carriers on their behalf.

Magic Quadrant for global third-party logistics providers

“Large multinational and global manufacturers, distributors, and retailers are requiring their 3PLs to offer a broader set of consistent and reliable services across more and more countries, and to integrate those services across end-to-end business processes so that they might be able to use them as a global preferred provider,” explains Aimi.

As a consequence, adds Aimi, the 3PL industry is progressing along a “maturity spectrum” in accordance with these new customer requirements, through a combination of acquisition and organic growth strategies.

“This Magic Quadrant is intended to chart the evolution of the largest 3PLs as they improve their ability to become a global preferred provider for their customers,” says Aimi. “Logistics and supply chain executives can use this research to better understand 3PLs and their capabilities when evaluating and selecting the right set of providers to meet their global logistics needs.”

Above the Radar

Aimi’s words of advice should resonate with the world’s largest logistics provider, DHL, which has just published the second edition of its Logistics Trend Radar.

The current report builds on the recent developments already identified in 2013, introduces new trends, and then sketches a future landscape for logistics professionals and the challenges they will face, but also outlines solutions that are underway—especially multi-channel retailing and predictive purchasing.

Some of the new trends the report highlights include omni-channel logistics, or the integration of different offline and online shopping channels; anticipatory logistics, or the application of big data analysis of customer product searches in order to send a shipment before the customer places an order; and crypto payment, the universal payment systems that allow global cross-currency payments to clear in seconds.

DHL Logistics Trend Radar

According to researchers, the Trend Radar report serves as a panoramic 360 degree view across the whole breadth of the logistics landscape. Based on this overview, the DHL research team will further explore selected trends in a “deep dive” format, based on research in cooperation with customers, research institutes, and industry experts.

“We combine our expertise with input from academia and other partners,” says Markus Kückelhaus, DHL’s director of trend research, adding that the Trend Radar paper is a good starting point for logistics professionals wanting to prepare their logistics network for future challenges.

Related Update: 2014/15 Top 50 Global & Domestic U.S. Third-Party Logistics Providers

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About the Author

Patrick Burnson's avatar
Patrick Burnson
Mr. Burnson is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts.
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