Manufacturers are a 3PLs best customer

Manufacturing companies accounted for over 78% of net revenues for logistics service providers in 2004, for a total of $18.3 billion, according to research conducted by ARC. Automotive, high-tech and consumer packaged goods were the three largest vertical industries, representing about 67% of manufacturing-related net revenues.

According to Adrian Gonzalez, director of ARC’s Logistics Executive Council and author of the study, “The fact that the logistics service providers 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 the service providers.”

The 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, logistics service providers want to differentiate themselves from the competition and attract customers that align well with their strategy and capabilities.”

ARC is developing a Logistics Service Provider Knowledge Center that will contain up-to-date information about the industry and a selection of service providers.

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