Whether compared to the second quarter of this year or the corresponding period of 2020, the Transportation Intermediaries Association’s third-quarter report offers a picture of a 3PL industry that had a robust three months.
Total shipments for the TIA participants examined increased 6.8% in the third quarter compared to the second, across all modes — truckload, LTL, and intermodal. Total revenue increased 10.3% from the previous quarter, while the average invoice per shipment increased 3.3 percent to $2,419 from $2,341.
The TIA’s total gross margin for the 3PL industry studied increased to 13.4 percent from 12.8 percent in the second quarter.
The data in the TIA report is also broken down by the size of the survey participants. The smallest of the evaluated 3PLs, those with annual revenue less than $16 million, exhibited a considerable shift between the second and third quarters.
“Problems recruiting capacity have harmed the smallest brokers the most,” according to the TIA’s assessment. “They’ve reacted by focusing on the most appealing cargoes.”
Shipments for 3PLs in the lowest category fell 10.3 percent in the third quarter compared to the second. However, the average invoice size increased by 19.5 percent, and overall revenue increased by 7.2 percent. However, the margins were only 1.2 percent.
On shipment volume that was up just 2.6 percent, the margin for 3PLs in the intermediate range — between $16 million and $100 million — was 9.4 percent. Revenue increased by 7.1 percent, while average invoice amounts increased by 4.5 percent.
The largest companies, those with more than $100 million in revenue, had their average invoice amount drop 0.5 percent from the previous quarter. Total shipments increased by 7.5 percent, while income increased by 10.7 percent. The larger enterprises, however, had the lowest gross margin among the three categories assessed by TIA, at 4.3 percent.
The way red ink turned black in the second and third quarters is particularly apparent in the margin data. The margin for the intermediate sector of 3PLs was recorded as minus 4.4 percent in the TIA’s second-quarter report. It was a negative 9.7% for enterprises with more than $100 million in revenue. In the second quarter, the smallest businesses had a positive margin of 6.9%.
The smallest companies, on the other hand, had the tightest margins in the third quarter, while the margins for the other two categories were consistently positive.
During the quarter, there was a considerable difference in modes of transportation. Total shipments increased 9.5 percent, and the invoice per load increased 5 percent to $2,410, indicating a successful quarter for truckload brokered freight. The truckload gross margin was 13.7 percent, up 90 basis points from the previous quarter.
LTL shipments brokered by 3PLs fell 2.5 percent to 130,886 during the quarter, compared to the same period the previous year. The invoice per load, however, increased by 7.5 percent to $465, while the gross margin per load increased by 13.5 percent to $97. The gross margin increased by 110 basis points to 20.9 percent.
3PLs that handled intermodal freight plainly struggled. Total shipments decreased by 1.3 percent, but the invoice amount per load increased by only 1.2 percent to $2,685 and the gross margin remained unchanged at 8.8%.
While many economist statistics have mostly ignored comparisons to comparable periods in 2020 due to the pandemic, transportation comparisons are finally being made against the third quarter of 2020, when a robust freight market was in full gear. The FreightWaves Outbound Tender Rejection Index increased gradually throughout the third quarter of last year, peaking at 26.88. By comparison, the OTRI for the third quarter of this year began at a lower level than that and ended at 21.78.
The performance of the 3PL industry in the third quarter of 2021 was remarkable in comparison to the third quarter of 2020, which was rather robust. Total shipments increased 10.6% year over year in the third quarter, total revenue increased 36.1 percent, and the gross margin increased 130 basis points. The invoice amount per shipment increased by 23% over the previous year.
