TT Logistics 50: Shippers, Carriers Seek Solutions to Logistics Challenges

By Daniel P. Bearth, Senior Features Writer

This story appears in the Nov. 17 print edition of Transport Topics.

Logistics companies face significant new challenges as both shippers and carriers look for ways to cope with financial turmoil, volatile fuel costs and slumping demand for goods and services.

Despite the challenges, the business of logistics — the procurement and management of freight transportation — continues to grow and evolve, which is illustrated in the 2008 edition of the Transport Topics Top 50 Logistics Companies.

Gross revenue for third-party logistics companies in the United States was $122 billion in 2007, up from $113 billion in 2006, said industry researcher Richard Armstrong of Armstrong & Associates.

By 2010, Armstrong said, he expects gross revenue for 3PLs to top $150 billion.

UPS Supply Chain Solutions and DHL Exel Supply Chain again rank Nos. 1 and 2 on the list, which is based on revenue generated from logistics activities in North America.

Acquisitions always have played an important role in the past in shaping some of the companies on the list. But this year, the ability to buy and sell companies diminished greatly after the collapse of several Wall Street investment banks and the subsequent credit squeeze.

While investors are still interested in making deals, many private equity firms no longer can borrow money as they have in the past, shifting the focus for some 3PLs on strategic acquisitions and cultivating growth from within.

C.H. Robinson Worldwide, the largest freight brokerage firm in North America, for example, purchased Transera International, a company that added new expertise in handling heavy-haul shipments and project logistics.

Jacobson Cos., Des Moines, Iowa, extended its warehousing and distribution business to the Southeast with the purchase of Dixie Warehouse Services in Louisville, Ky.

For full details on developments in logistics, see the pullout section in this issue.