Grim quarterly numbers dominate 3PL sector with few exceptions
Time：2016-06-21
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DHL Supply Chain and Global Forwarding, whose experience appears broadly representative, declined 15.1 per cent year on year to US$7.4 billion this year, according to a report from ARC Advisory Group.
These negative numbers are partly the result of Q1 2015`s abnormally robust air cargo figures due to the port disruptions on the US west coast.
But even taking the labour slowdowns into consideration, these Q1 numbers reflect an underlying malaise in the sector.
Meanwhile, the energy price slump went into its second year, decreasing demand for oil and gas-related traffic.
ARC also noted that the currency effect was a factor, with some companies reporting growth in currencies that reflect negatively when converted to US dollars due to currency fluctuations.
ARC estimated that domestic transport services - consisting of brokerage/domestic freight forwarding and managed transportation services - fell 3.5 per cent.
Warehousing services dropped 5.7 per cent. In international transport services - which includes international freight forwarding and custom services - the sector declined 9.5 per cent.
DHL`s woeful numbers were indicative of the extent of contraction, with other 3PL players such as Agility, which posted a 21.5 per cent, decline, and DSV, down 25.4 per cent did even worse.
But XPO Logistics revenues surge from $2.2 billion to $2.7 billion for the same quarter. Ryder and JB Hunt also posted strong numbers, but their growth was, ultimately, not enough to offset the general decline across the sector.