Third-Party Logistics (3PL) Industry

Q3 2022: Mergers and Acquisitions Trend Report

Industry Overview

• The largest domestic Third-Party Logistics (3PL) transaction in 2022 was DB Schenker’s acquisition of USA Truck for $483 million
• The overall outlook for the Third-Party Logistics sector is positive
• Generally, freight demand has grown, intensifying the need for freight transportation and logistics services
• Retailers, manufacturers, and distributors demand more logistics services such as forwarding, brokerage and warehousing
• Challenging industry services such as cross border transactions maintain their reliance on 3PL logistics because these transactions are complex and riskier, culminating in more demand for operators’ expertise

Key Industry Trends

• E-commerce is anticipated to continue to drive demand for 3PL services as businesses transition from retail stores to online transactions
• Growth in the economy, an increase in consumer spending, and an increase in industrial, retail, and trade activity has traditionally amplified the demand for transportation and industry services, a trend that will continue
• 3PL companies are focused on implementing data analytics and machine learning tools to provide valuable network insights in order to mitigate waste and maximize efficiency
• The industry has observed and increase in fulfillment centers and distribution hubs to meet the rising demand for last-mile deliveries and white glove delivery services

Recent M&A Transactions

Historical Performance

• Due to higher demand from e-commerce and grocery retailers, the industry expected 5.7% revenue growth in 2022
• Although consumer spending and in-person commerce declined sharply in 2021, e-commerce demand soared which helped the 3PL Industry maintain its growth trajectory

Future Industry Growth

• Per capita disposable income and consumer spending are expected to rise at annualized rates of 0.8% and 1.7%, respectively, over the next five years to 2027. Resurgent spending growth should result in higher retail sales, which, when combined with rising manufacturing output, is expected to result in higher freight volumes
• Due to the high volume of small packages shipped, ecommerce is expected to increase demand for 3PL services, which is expected to grow at an annualized rate of 8.2% to reach an estimated $1.2 trillion.
• Over the next six years, industry revenue is forecasted to rise from $237.7 billion in 2022 to $282.7 billion in 2027.