Sunbelt Finance Freight-Image-1 Large 3PLs Hurt by Higher Rates Freight Brokers

Large 3PLs Hurt by Higher Rates

While rising spot market pricing is always good for carriers, many 3PLs (brokers) feel the pinch in these times. Since large 3PLs have long term deals with a good many of their customers, rising spot market rates can put a strain on their net revenue (gross revenue less carrier costs). CH Robinson (CHRW) reported a 22% decline in year over year earnings per share for the second quarter of 2017.

As CH Robinson, and other large traditional 3PLs, continues to grow, it may be at the expense of their margins. As Amazon, Uber and other players enter the market, it may lead to shippers refusing to accept contract price increases. Some analysist think the contract price vs spot market trend impacting 3PLs could be part of a larger trend.

DAT reported spot market rates were up to $1.90 per mile at the beginning of July.

Leave a Reply

Your email address will not be published. Required fields are marked *