By Robert Bowman, published June 6, 2014 on Forbes.com.
Third-party logistics (3PL) providers play an essential role in hooking up shippers with the right kind of transportation service. But their numbers are shrinking.
The trend is toward fewer, larger players. A recent example was the acquisition of One Stop Logistics by Echo Global Logistics, Inc. Chicago-based Echo earned $884 million in revenue in 2013, drawing on a network of more than 26,000 transportation providers. One Stop, with $50.7 million in gross revenue last year, offers both truckload and less-than-truckload brokerage services out of offices in Northern California and Florida. Purchase price of the deal was $37.3 million.
Two months earlier, Coyote Logistics LLC bought Access America Transport. The combined company has revenues of more than $2 billion, working with some 40,000 carriers out of 17 locations in North America. That deal created the second-largest freight broker in the country, according to Jett McCandless, founder and president of logistics consultancy Carrier Direct. And earlier this year, XPO Logistics, Inc. snapped up Pacer International, the third largest intermodal service provider in North America, for $335 million.
Prior to 2013, said McCandless, there was only one broker in North America with revenues of more than $1 billion — C.H. Robinson Worldwide, Inc. (Cincinnati, OH-based Total Quality Logistics takes issue with that claim, noting that it hit the $1 billion mark in 2011.) Today, a handful of companies has surpassed that benchmark, but the total number of providers is on the decline.
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