According to ARC Advisory Group, Over 78% of Logistics Service Providers Net Revenues Come from Manufacturers

Business Wire, July 7, 2005

DEDHAM, Mass. -- Research on twenty leading Logistics Service Providers (3PL) revealed that manufacturing companies accounted for over 78 percent of net revenues in 2004, or a total of $18.3 billion. Automotive, High Tech, and Consumer Packaged Goods were the three largest vertical industries, representing about 67 percent of manufacturing-related net revenues. These findings appear in ARC's in-depth market study Strategic Guide for Logistics Service Providers (3PLs): Industry Trends, Provider Profiles, and Maturity Model.

According to Adrian Gonzalez, Director of ARC's Logistics Executive Council and author of the study, "The fact that the LSP industry derives most of its net revenues from the manufacturing sector is not surprising, but quantifying the contribution is very helpful for strategic planning purposes. For example, the data highlights industries that are currently under-served, such as Chemicals and Pharmaceutical/Healthcare, which represent growth opportunities for LSPs."

Study Clarifies LSP Strengths and Capabilities

The Logistics Service Provider market encompasses many different types of companies, with origins ranging from trucking firms to industrial manufacturers. Terms such as Third Party Logistics (3PL) and Lead Logistics Providers (LLP) have also emerged in an effort to create differentiation. Briefly stated, there is no simple definition of this market, especially as its scale and scope continue to evolve.

The Strategic Guide study was initiated at the request of ARC clients -- including manufacturers, retailers, software vendors, and logistics service providers -- who were interested in obtaining a more granular and quantitative understanding of the market. Gonzalez comments, "Our end-user clients need help in identifying service providers who have experience in their vertical industry managing the types of services they wish to outsource. Similarly, LSPs want to differentiate themselves from the competition and attract customers that align well with their strategy and capabilities. Other publications focused on this industry such as 'Top 100 3PL' lists do not provide the level of detail necessary to meet these needs."

The Strategic Guide study includes quantitative profiles of twenty Logistics Service Providers, including some of the largest providers in the world. These service providers serve as a reasonable proxy for the overall market and they're generally recognized as market leaders or innovative by clients, the media, and analysts. Collectively, these service providers accounted for over $52 billion in Gross Revenues in 2004.

Each LSP profile contains revenue breakdowns by Geography, Sector, Vertical Industry, and Service.

--BDP International

--Cardinal Logistics

--Caterpillar Logistics

--CH Robinson

--Choice Logistics

--DHL Logistics

--Exel

--Kuehne & Nagel

--Logistics Management Solutions

--Menlo Worldwide

--Meridian IQ

--Odyssey Logistics & Technology

--Ozburn-Hessey Logistics

--Penske Logistics

--Ryder Logistics

--Saddle Creek

--Schneider Logistics

--TNT Logistics

--Transplace

--UPS Supply Chain Solutions

ARC is developing a Logistics Service Provider Knowledge Center that will contain up-to-date information about the industry and a wider selection of service providers. ARC expects to include additional profiles in future editions of the study. Logistics Service Providers that are interested in participating in the next version of the study, please contact Ted Harwood at 781.471.1122 or tharwood@arcweb.com.

Webcast Summarizing Findings of Study

A webcast summarizing the key findings of the study will be broadcast on July 13th at 11:00 EDT. To register, please visit http://www.arcweb.com/Events/webforums/register.asp

For more information about the study, please visit http://www.arcweb.com/research/ent/lsp.asp.> Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. No matter how complex your business issues, our analysts have the expert industry knowledge and first-hand experience to help you find the best answer. We focus on simple yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and share holder value. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax 781-471-1100, E-mail info@arcweb.com, Web arcweb.com.