EXTRAORDINARY GROWTH Third-Party Logistics Market Results and Trends for 2019 Including Estimates for 190 Countries

June 2019

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Inventory Builds to Beat Import Tariffs and a Strong Economy Drive Extraordinary Third-Party Logistics Market Growth 2018 will go down as an outstanding year for third-party logistics (3PL) in the U.S. The two main growth drivers were an extraordinary inventory build as shippers’ imported products to beat the implementation of Trump’s import tariffs and solid domestic economic expansion. Coupled with tight domestic carrier capacity driving up rates, increasing fuel surcharge revenue, and expanding e-commerce business, the 2018 3PL market realized extraordinary growth over 2017.

Figure 1. U.S. 3PL Market 2000-2019E (US$ Billions)

$240 $227.2

$220 $213.5

$200 $184.3 $180 $166.8 $161.2 $157.8 $160 $147.0 $142.0 $140 $135.5 $127.0 $127.5 $119.0 $120 $113.6 $104.2 $107.1 $100 $89.4

$80 $75.7 Gross Revenue/Turnover Gross $68.4 $64.2 $60 $56.8

$40

$20

Year

The U.S. 3PL market net revenues (gross revenues less purchased transportation) grew 12.1% to $86.4 billion and overall gross revenues increased 15.8%, bringing the total U.S. 3PL market to $213.5 billion in 2018. The last time the U.S. saw this level of 3PL gross revenue growth was in 2010 when the 3PL market bounced back 19% from its 16% decline in 2009 during the great recession. Domestic Transportation Management (DTM) The non-asset-based Domestic Transportation Management segment (DTM), which primarily consists of freight brokerage services and to a lesser extent managed transportation, and digital freight matching companies/digital freight brokers (DFMs), led all other 3PL segments with overall gross revenue increasing a whopping 20.7% to $86.5 billion. DTM providers’ top-line revenues benefited from heavy port to warehouse and warehouse to warehouse moves, the strong domestic economy, rising carrier rates, increased fuel surcharge revenue, and continued outsourcing amongst shippers. To find a better growth year, we have to go back to 2005 when the DTM segment had year-over-year growth of 21.2%.

Table 1. U.S. 3PL Market Growth by Segment

Gross Revenue % Change 2018 Net Revenue 1995-2018 3PL Segment (Turnover) vs. 2017 Net (US$ Billions) CAGR (US$ Billions) Revenue

DTM 86.5 13.4 23.2% 11.6% ITM 61.9 22.1 12.1% 11.3% DCC 18.4 17.8 15.8% 7.4% VAWD 43.3 33.1 6.3% 10.8% Total* 210.1 86.4 12.1% 10.1% *Total 2018 gross revenue (turnover) for the 3PL market in the U.S. is estimated at $213.5 billion. $3.4 billion is included for the contract logistics software segment.

When trucking capacity gets tight, shippers often turn to DTM providers (DTMs) for help. 2017 was noted by a surge in carrier capacity demand later in the year which continued into 2018. Conditions were further exasperated by the regulatory ELD (electronic logging device) mandate for carriers which reduced total truckload capacity over 3%. 2019 has started off softer, but it seems like pricing levels are holding.

Strong demand combined with sequential carrier rate increases allowed DTM 3PLs to plan capacity better than in 2017 positively impacting DTM’s net revenue growth. The average gross margin increased to 15.5% from 15.2% and net revenue increased a stellar 23.2% to $13.4 billion.

The DTM segment is led by C.H. Robinson. Its North American Surface Transportation and Managed Services (C.H. Robinson’s TMC division) net revenues increased 16.9% from $1,599 million in 2017 to $1,869 million in 2018 and accounted for 13.9% of the total DTM segment net revenue. While it is still the segment leader, its market share as measured by net revenue dropped year-over-year and is significantly lower than its market share of over 20% ten years ago. C.H. Robinson is losing domestic market share to traditional competitors such as J.B. Hunt’s ICS division, Total Quality Logistics, and Echo Global Logistics, which posted 50.8%, 31.1%, and 24% net revenue increases respectively. Each also generate over $1 billion in gross revenue.

On the DTM “watch list” is rapidly growing Austin, Texas-based Arrive Logistics and Nolan Transportation Group (NTG). Arrive had year-over-year net revenue growth of 140% to $48 million and 2018 gross revenue of $368 million pushing it over the $300 million purchased transportation hurdle; it now has the purchasing power of the largest shippers in the U.S. Its CEO Matt Pyatt and President Eric Dunigan both came from Command Transportation and founded Arrive in 2014 before Command’s $420 million sale to Echo Global Logistics in June 2015. NTG had year-over-year net revenue growth of 76.9% to $107 million and 2018 gross revenue of $811 million. Gryphon Investors bought a majority stake in NTG through its portfolio company Transportation Insight earlier this year.

The DTM market is also seeing emerging competition from new digital freight brokers (DFBs) such as Uber Freight and Convoy which generated $300 and $359 million in gross revenue respectively and Transfix to a lesser extent with $80 million in gross revenue. Each is growing without the same profit requirements of traditional DTMs. While Transfix is generating a respectable 12% gross margin,

it is estimated that Convoy and Uber Freight are closer to 3%. What is truly impressive about these three digital freight brokers is that combined they have received significant funding; Uber Freight from its parent and Convoy with $265.5 million in outside investment and Transfix with over $78.5 million. These DFBs are being valued like software companies at 3 times or more of revenue, versus the traditional DTM valuation for mid-sized freight brokers of 10 times EBITDA (earnings before interest, tax, depreciation and amortization).

One thing digital freight brokers such as Uber Freight, Convoy, and Transfix have done, is place an emphasis on “digitalizing” DTM operations. While managed transportation has been fairly automated for years via transportation management systems (TMS), electronic data interchange, and other systems interfaces, most freight brokerage operations still have many manual carrier sales/procurement and back office processes.

A plethora of technology solutions have come to market over the past three years to augment traditional TMS and automate freight brokerage operations. These tend to fall into four groups:

‐‐ Account Management Automation ‐‐ Capacity Intelligence and Load Execution ‐‐ Visibility and Exception Management ‐‐ Back Office Automation

It is our opinion that many data entry and manual processes will be eliminated by artificial intelligence and machine learning, improved transportation network systems/application interfaces, and improved data mining and analysis. With so many innovative solutions available, the real question for DTM providers is “What is your digitalization strategy?” Dedicated Contract Carriage (DCC) Tightness in domestic motor carrier capacity drove solid growth within the more mature, asset-heavy Dedicated Contract Carriage (DCC) 3PL segment. As shippers struggled to find capacity in contract carrier and spot markets, some turned to DCC to lock in capacity.

We estimate that dry van trailers are used for 70% of DCC truckloads, reefers 16%, flatbeds 6%, and tankers and others 8%. Three‐fourths of major DCC providers have dry vans and reefers. Half of major DCC providers have flatbeds. Customer trailers/containers are often used especially for retail operations like Walmart. Other types of equipment include bulk tankers, curtain sides, roller beds, end dumps, drop decks, and dry vans with lift gates.

2018 DCC segment net revenues grew an estimated 15.8% to $17.8 billion. The domestic segment leader J.B. Hunt Dedicated Contract Services (DCS) with 10,115 power units in dedicated, posted outstanding net revenue growth of 25.9% to $2.2 billion pushing its DCC market share over 12% on a net revenue basis.

Werner Dedicated had net revenue growth of 19.4% to $947 million and Ryder, another notable one, had net revenue growth of 10.3% to $871 million.

The seventh largest DCC provider, Schneider National Dedicated with 3,917 power units in dedicated,

had sluggish growth of 2.3% bringing its net revenue to $733 million. Mid-market DCC providers Marten Dedicated and Universal Dedicated had a very good year with 34.2% and 29.4% growth, respectively, driving their DCC net revenues to $224 million and $121 million, respectively.

We expect more moderate DCC demand going into 2019 with growth closer to 2017’s 10.2%. A lot will depend on underlying contract truckload rates.

Table 2. Top 50 DCC 3PLs by 2018 Power Units*

Rank Provider DCC Power Units

1 J.B. Hunt DCS 10,115 2 Knight-Swift Transportation 6,188 3 Ryder DTS 6,000 4 Penske Logistics 5,310 5 Werner Enterprises Dedicated 4,500 6 NFI 4,000 7 Schneider National Dedicated 3,917 8 Ruan DCT 3,704 9 Cardinal Logistics Holdings 3,155 10 U.S. Xpress Enterprises 2,700 11 DHL Supply Chain North America 2,400 12 Solistica 2,339 13 C.R. England Dedicated 2,200 14 Black Horse Carriers 2,104 15 Covenant Transportation Group 1,584 16 Hub Group Dedicated 1,386 17 UPS Supply Chain Solutions 1,382 18 Averitt Express 1,348 19 Marten Transport 1,111 20 Day & Ross Transportation Group 1,016 21 Commercial Warehousing 1,000 22 Universal Logistics Holdings 925 23 Cowan Systems 766 24 Aim Integrated Logistics 703 25 Celadon Group 700 26 CEVA Logistics U.S. 604 27 Odyssey Logistics & Technology 600 27 Performance Team 600 28 CRST Dedicated 500 29 G&D Integrated 468 30 Bay & Bay Transportation Services 425 31 Lily Transportation 415 32 XPO Logistics 400 33 Sunteck TTS 380 34 Crowley Logistics 335 35 Dupre' Logistics 330 36 Legacy Supply Chain Services 325 37 Warehouse Services 314 38 USA Truck 311 39 ITS Logistics 250 39 LeSaint Logistics 250 40 Dart Advantage Logistics 238 41 East Coast Warehouse & Distribution 230 42 Midwest Express Group 221 43 Saddle Creek Logistics Services 220 44 ODW Logistics 215 45 Kenco Logistic Services 187 46 Ascent Global Logistics 171 47 Kane Is Able 165 48 Evans Distribution Systems 155 *DCC power units are company reported or Armstrong & Associates, Inc. estimates.

J.B. Hunt Dedicated Contract Services (DCS) continues to be the largest DCC provider. A spot it’s held for over a decade. Knight-Swift Transportation, with its combined dedicated units from its Knight

Trucking, Swift Truckload, Swift Dedicated, and Swift Refrigerated trucking segments, took second place from Ryder which fell to the number three spot on our Top 50 list this year. Ryder Dedicated Transportation Solutions’ (DTS) total includes more than 1,000 straight trucks and vans and also includes tractors from Ryder Supply Chain Solutions’ operations. Penske, with additional power units obtained from its July 2018 acquisition of Epes Transport System, moved up a spot to number four this year. Ruan and NFI are still the largest privately owned DCC providers. Solistica (formerly FEMSA Logistica) is the largest Mexico-based DCC provider and Day & Ross Transportation is the largest Canada-based DCC provider on our Top 50 list. International Transportation Management (ITM) The International Transportation Management segment (ITM), consisting of air and ocean freight forwarding and complementary value-added services, posted 15.4% gross revenue growth in 2018 to $61.9 billion. This was ITM’s best showing since 2010 when the segment bounced back over 30% from the great recession. In 2018, ITM participated in the import tariff inventory builds and increased air freight primarily due to growth in e-commerce. Customs compliance departments within freight forwarders also saw increased business as shippers worked to minimize the impact of new import tariffs. 2018 ITM net revenues grew 12.1% to $22.1 billion.

Ocean freight remains in an overcapacity situation and we anticipate low single-digit TEU (20’ trailer equivalent unit) growth in most trade lanes in 2019. Air freight volumes declined at the end of 2018 and have been soft at the beginning of 2019, but the hope is that a new U.S./China trade deal and e-commerce volumes should put a floor on potential declines.

DSV Air & Sea Americas led the ITM pack posting 23.5% net revenue growth to $404 million and 16.6% gross revenue growth to $1.7 billion. Its overall gross profit margin increase to 23.9% from 22.6% in 2017, shows that DSV was able to manage customer pricing increases and capacity buy side agreements very well.

Expeditors International, the largest of the U.S.-based freight forwarders, had a very good year with gross revenue increasing 17.6% to $8.1 billion and net revenue increasing 13% to $2.6 billion. Customs brokerage and other services, which includes DTM and Value-Added Warehousing and Distribution (VAWD), is now Expeditor’s fastest growing business segment. It has grown to 45% of Expeditor’s total net revenues, air freight is 33%, and ocean freight has declined to 22%.

C.H. Robinson which acquired $807 million ITM provider Phoenix International in 2012 and Aussie ITM provider APC Logistics in 2016, also had growth of note in 2018. It has done a good job expanding its freight forwarding operations and developing solutions combining its domestic and international transportation management operations. C.H. Robinson Global Forwarding’s gross revenues grew 16.8% in 2018 to $2.5 billion and its net revenues rose 12.1% to $544 million. Value-added Warehousing and Distribution (VAWD) Even with the import tariff inventory builds, Value-added Warehousing and Distribution (VAWD) had the lowest rate of growth in 2018 compared to its transportation management related brethren. However, VAWD’s gross revenue growth of 8% to $43.3 billion was the best the segment has realized since 2011 when it posted an 8.3% increase.

In terms of year-over-year net revenue growth, VAWD net revenues grew 6.3% to $33.1 billion. Ryder SCS and Kuehne + Nagel Contract Logistics Americas lead the pack for the second year in a row among larger VAWD providers with 17.1% (to $1,765 million) and 15.9% (to $1,044 million) net revenue growth respectively. Within the mid-market, Atlanta Bonded Warehouse showed solid growth with a 10.6% increase in net revenue to $115 million.

While many warehouses were full in 2018, pricing pressure continues to dominate the business landscape. 2019 could be an interesting year for VAWD without the extraordinary import tariff inventory build we had in 2018. If customers decide to drawdown inventories to reduce carrying costs, some VAWD providers could see a significant decrease in utilization.

Additionally, the “Amazon Effect” is impacting VAWD 3PLs that are seeing increased competition from Amazon for labor and warehouse space. This has dramatically impacted warehouse employee wages and lease rates in key distribution areas such as Plainfield, Indiana. In turn, it is driving significant interest from VAWD 3PLs to automate warehouses with autonomous robotic solutions. With some autonomous robots costing around $25-30,000, the cost/benefit and positive return on investment are increasing 3PLs interest in warehouse robots to support activities such as picking, putaway, and cycle counting.

Autonomous warehouse robots are devices that are programmed to perform tasks with little to no human intervention or interaction in a warehouse environment. They can vary significantly in size, functionality, mobility, dexterity, intelligence, and cost. Even more than in manufacturing, the need for supply chains to rapidly scale up while avoiding costly infrastructure revamps is encouraging robotics adoption. Interest in autonomous warehouse robots continues to grow, especially with the rapid shipping required of e-commerce, which makes logistics and supply chain automation one of the fastest-growing applications for mobile robots.

Currently, many companies that use autonomous robots have implemented them for targeted functions within their supply chain, piloting various robots to verify expected efficiency gains. Lean manufacturing, international trade tensions, aging workforces, and the demand for rapid e-commerce order fulfillment have all contributed to growth in supply chain automation. Aethon, Amazon Robotics (formerly Kiva Systems), Canvas Technology, Clearpath Robotics, Fellow Robots, Fetch Robotics, GreyOrange, IAM Robotics, Omron Adept Technology, OPEX, PINC Solutions, Seegrid, Starship Technologies, Swisslog, Vecna Robotics, and Waypoint Robotics are some of the top autonomous robotics companies serving the supply chain market.

There are four basic types of autonomous warehouse robots:

‐‐ Goods-to-Person Picking Robots ‐‐ Self-driving Forklifts ‐‐ Autonomous Inventory Robots ‐‐ Unmanned Aerial Vehicles or Drones

Some benefits of utilizing autonomous warehouse robots include increased efficiency and productivity, decreased long-term costs, labor and utilization stability, error and risk rate reduction, quick ramp- ups to meet seasonal demands, and improved safety for employees in high-risk work environments, to name few, while performing less important, mundane tasks so humans can work collaboratively to focus on more strategic efforts that cannot be automated. In addition, autonomous robots deployment in

warehousing operations reduces travel time and improves picking operations from 100-120 to 200-300 picks per hour. In some cases, autonomous robots can increase efficiency by 3-4 times.

Figure 2. U.S. 3PL Market Segment Net Revenues and CAGRs 1995-2019E*

$40,000 1995–2018: 10.8% $35,000

$30,000

$25,000 11.3%

$20,000 7.4% $15,000

(US$ Millions) (US$ 11.6% $10,000

$5,000

Value-Added Warehousing & Distribution (VAWD) - Asset Based Dedicated Contract Carriage (DCC) - Asset Based International Transportation Management (ITM) - Non-Asset Based Domestic Transportation Management (DTM) - Non-Asset Based

*CAGRs are from 1995-2018.

U.S. segment net revenue compound annual growth rates range from 10.8% to 11.6% for all segments except DCC which is 7.4%. Although DCC is a fairly mature U.S. segment, it had the largest year-over- year net revenue increase of all segments in 2017 and had the second largest in 2018 increasing by 15.8% over 2017. We anticipate 2019’s DCC growth will be similar to 2017’s.

Table 3. Top 50 U.S.-based 3PLs by Gross Revenue*

2018 Gross Revenue Rank Provider (US$ M) 1 C.H. Robinson 16,631 2 XPO Logistics 10,850 3 UPS Supply Chain Solutions 9,814 4 J.B. Hunt (JBI, DCS & ICS) 8,214 5 Expeditors 8,138 6 Kuehne + Nagel (Americas) 6,594 7 DHL Supply Chain North America 4,178 8 Coyote Logistics 4,000 9 Ryder Supply Chain Solutions 3,731 10 Hub Group 3,684 11 Total Quality Logistics 3,643 12 FedEx Logistics 3,170 13 DB Schenker (Americas) 3,025 14 Burris Logistics 3,022 15 Transplace 2,886 16 Schneider Logistics & Dedicated 2,711 17 Panalpina (Americas) 2,596 18 Landstar 2,542 19 Echo Global Logistics 2,440 20 CEVA Logistics (Americas) 2,427 21 DSV (Americas) 2,358 22 Penske Logistics 2,300 23 Transportation Insight 2,290 24 GEODIS North America 2,139 25 NFI 2,000 26 Worldwide Express/Unishippers 1,650 27 Americold 1,595 28 BDP International 1,552 29 Knight-Swift Transportation 1,550 30 Ingram Micro Commerce & Lifecycle Services 1,500 31 Werner Enterprises Dedicated & Logistics 1,465 32 GlobalTranz Enterprises 1,384 33 OIA Global 1,373 34 MODE Transportation 1,255 35 syncreon 1,165 36 Universal Logistics Holdings 1,148 37 SunteckTTS 1,110 38 APL Logistics (Americas) 1,095 39 Radial 1,082 40 TransGroup Global Logistics 1,020 41 Odyssey Logistics & Technology 1,018 42 Lineage Logistics 1,000 43 Ruan 957 44 Crane Worldwide Logistics 916 45 Agility (Americas) 886 46 Radiant Logistics 842 47 Nolan Transportation Group 811 48 U.S. Xpress 809 49 Cardinal Logistics Management 805 50 Nippon Express (Americas) 800 *Revenues are company reported or Armstrong & Associates, Inc. estimates and have been converted to US$ using the average annual exchange rate in order to make non-currency related growth comparisons.

C.H. Robinson, XPO Logistics and UPS Supply Chain Solutions continue to hold the top three spots, respectively, in our Top 50 U.S.-based 3PLs list. J.B. Hunt took fourth place from Expeditors which dropped to fifth. Burris Logistics, a Top 10 player last year, fell five spots landing at fourteenth for 2018. New entrants to this year’s list include Knight-Swift Transportation, Odyssey Logistics & Technology, Agility (Americas) and Nolan Transportation Group. Merger & Acquisition Activity Large 3PL M&A deals made a comeback in 2018 with 14 trackable deals having purchase prices over $100 million. Financial buyers (such as The Jordan Company, Providence Equity Partners, Gryphon

Investors, and Ridgemont Equity Partners) continue to be motivated investors in the 3PL non-asset/ light-asset space as they find attractive internal rates of return and cash-to-cash payoffs.

Figure 3. 3PL Acquisitions Over $100 Million (1999-2018) 20

18 18

14 14

12 11 10 9 9 8

6 6 5 5 5 5 5 4 4 4 3 3 3 2 2 1 1 0 0

GlobalTranz has had a flurry of M&A activity in the freight brokerage space over the last few years. Under the ownership of Providence Equity Partners, GlobalTranz acquired Global Freight Source, Logistics Planning Services, Worthington Logistics Services, Apex Logistics Group, and AJR Transportation.

In July 2018, GlobalTranz was acquired by The Jordan Company (the prolific private equity firm that acquired Odyssey Logistics & Technology and Unitrans in 2017). Under the helm of The Jordan Company, GlobalTranz continued with the acquisitions of SynchOne, AFN Logistics, Our Freight Guy, and Circle 8 Logistics. Less than a year into the ownership of GlobalTranz, The Jordan Company sold it back to Providence Equity Partners.

After nine strategic acquisitions throughout the United States and changing private equity ownership twice in two years, GlobalTranz has almost tripled in size and is now the tenth largest DTM in the United States.

Figure 4. GlobalTranz Ownership and Acquisition Timeline

Our Circle 8 Freight Logistics Guy

AFN AJR SynchOne Transportation Logistics ACQUISITIONS

Global Logistics Worthington Apex Freight Planning Logistics Logistics Source Services Solutions Group

Providence Equity Partners The Jordan Company Providence OWNERSHIP 2017 2018 2019

Strategic buyers CJ Logistics and Hub Group made significant acquisitions in 2018. Korean headquartered CJ Logistics acquired DSC Logistics for $216 million to expand its U.S. Value-Added Warehousing & Distribution (VAWD) footprint and Hub Group acquired CaseStack for $255 million providing it with an integrated VAWD and DTM service offering.

M&A activity in 2019 started quiet but has started to pick up momentum. Two big deals will affect global third-party logistics and domestic transportation management secondarily in North America. French shipping group CMA CGM has acquired CEVA Logistics for $1.65 billion. DSV is acquiring Panalpina in a major deal awaiting approval. The $4.6 billion deal will create one of the biggest cargo handling and third-party logistics companies in the world.

C.H. Robinson continues to pick up niche players. In February, it acquired The Space Cargo Group, a freight forwarding group that expands its presence in Spain and Columbia. And in May, C.H. Robinson acquired Italian-based Dema Service to expand its road transportation services across Europe.

Value-Added Warehousing and Distribution had two large deals close in May 2019. Private equity firm Blackstone sold Cloverleaf Cold Storage and its recently acquired Zero Mountain to Americold in a deal valued at $1.2 billion. Lineage Logistics (with financial investors Bay Grove Capital, Stonepeak Partners, D1 Capital Partners, et. al.) acquired rival Preferred Freezer Services for approximately $1 billion.

XPO Logistics, which was on a buying binge up through 2015, has remained quiet. We expect continued velocity in 2019. However, deal flow continues to be challenging as too many buyers and too much money is following a limited number of deals. Global Logistics Costs and Third-Party Logistics Revenues Global third-party logistics revenues reached $951 billion in 2018 (a 9.1% increase over 2017) and are on track to exceed $1.3 trillion in 2023. Post-industrial societies have the largest 3PL revenues. Developing countries tend to have lower 3PL revenues. The numbers reflect greater outsourcing to 3PLs in developed, more economically sophisticated countries.

While developing economies in Africa, the Middle East and South America have shown growth spurts, it must be remembered that Asia Pacific logistics costs are almost 40% of the global total (Europe is 21% and North America is 22%). The countries with the largest logistics spends are China ($1.9 trillion) and the U.S. ($1.6 trillion).a

Table 4. 2018-2019E Global Logistics Market and 3PL Segment Revenues by Country/Region (US$ Billions)

2018 2019E

2018 Logistics 2018 3PL 2018 ITM 2018 VAWD 2018 TM 2019E 2019E 3PL 2019E ITM 2019E VAWD 2019E TM Country/Region Cost Revenue Revenue Revenue Revenue Logistics Cost Revenue Revenue Revenue Revenue Algeria 29.8 2.3 0.7 0.6 1.0 30.3 2.4 0.7 0.6 1.1 Egypt 30.0 2.5 0.7 0.6 1.2 30.0 2.6 0.8 0.7 1.1 Morocco 17.7 1.5 0.4 0.4 0.7 18.2 1.5 0.4 0.4 0.7 Nigeria 64.0 4.6 1.4 1.2 2.0 71.6 5.2 1.5 1.3 2.4 South Africa 40.1 4.1 1.2 1.0 1.9 40.5 4.2 1.2 1.1 1.9 Sudan 5.9 0.4 0.1 0.1 0.2 5.5 0.4 0.1 0.1 0.2 Africa-Others 162.5 11.8 3.3 3.3 5.2 165.9 12.6 4.0 3.6 5.0 Africa Total 350.0 27.2 7.8 7.2 12.2 362.0 28.9 8.7 7.8 12.4

Table 4. 2018-2019E Global Logistics Market and 3PL Segment Revenues by Country/Region (US$ Billions) 2018 2019E

2018 Logistics 2018 3PL 2018 ITM 2018 VAWD 2018 TM 2019E 2019E 3PL 2019E ITM 2019E VAWD 2019E TM Country/Region Cost Revenue Revenue Revenue Revenue Logistics Cost Revenue Revenue Revenue Revenue Australia 122.0 12.7 3.7 3.2 5.7 121.9 12.8 3.8 3.2 5.7 Bangladesh 44.9 3.6 1.1 0.9 1.6 49.1 4.0 1.2 1.0 1.8 China 1,944.1 203.2 59.7 51.4 90.4 2,061.4 217.5 64.3 55.0 96.3 Hong Kong 30.8 3.5 1.0 0.9 1.6 32.4 3.7 1.1 0.9 1.7 India 352.9 25.4 7.5 6.4 11.3 386.0 28.2 8.3 7.1 12.6 Indonesia 224.9 16.9 5.0 4.3 7.5 242.2 18.4 5.4 4.7 8.1 Japan 422.6 45.2 13.3 11.4 20.1 439.9 47.5 14.0 12.0 21.1 Macao SAR 5.5 0.6 0.2 0.2 0.2 5.8 0.6 0.2 0.2 0.2 Malaysia 46.1 3.4 1.0 0.9 1.5 48.5 3.6 1.1 0.9 1.6 New Zealand 22.8 2.2 0.6 0.6 1.0 23.6 2.3 0.7 0.6 1.0 Philippines 43.0 3.1 0.9 0.8 1.4 46.4 3.4 1.0 0.9 1.5 Singapore 30.7 3.6 1.1 0.9 1.6 31.7 3.8 1.1 1.0 1.7 South Korea 145.6 16.5 4.9 4.2 7.3 149.0 17.0 5.0 4.3 7.6 Taiwan 53.2 5.9 1.7 1.5 2.6 54.3 6.1 1.8 1.5 2.7 Thailand 73.1 5.5 1.6 1.4 2.5 77.5 5.9 1.7 1.5 2.6 Vietnam 48.3 3.7 1.1 0.9 1.7 52.1 4.1 1.2 1.0 1.9 Asia Pacific-Others 52.1 3.8 1.2 1.1 1.5 51.7 3.9 1.0 1.1 1.6 Asia Pacific Total 3,662.6 358.8 105.6 91.0 159.5 3,873.5 382.8 113.1 96.9 169.7 Kazakhstan 25.8 2.1 0.6 0.5 1.0 24.8 2.1 0.6 0.5 1.0 Russia 262.5 20.7 6.1 5.2 9.2 259.3 20.7 6.1 5.2 9.2 Ukraine 19.8 1.6 0.5 0.4 0.7 21.4 1.7 0.5 0.4 0.8 CIS-Others 40.0 3.1 0.9 0.9 1.3 43.1 3.5 1.1 1.1 1.3 CIS Total 348.1 27.5 8.1 7.0 12.2 348.6 28.0 8.3 7.2 12.3 Austria 42.6 4.4 1.3 1.1 2.0 42.7 4.5 1.3 1.1 2.1 Belgium 46.4 4.9 1.4 1.2 2.3 46.3 5.0 1.5 1.3 2.2 Czech Republic 26.6 2.6 0.8 0.7 1.1 27.1 2.7 0.8 0.7 1.2 Denmark 33.7 3.5 1.0 0.9 1.6 33.6 3.5 1.0 0.9 1.6 Finland 25.6 2.7 0.8 0.7 1.2 25.7 2.7 0.8 0.7 1.2 France 263.3 28.2 7.9 5.7 14.3 262.0 28.3 8.0 5.7 14.3 Germany 352.5 37.7 10.9 7.6 18.8 349.3 37.7 11.0 7.6 18.7 Greece 29.8 2.6 0.8 0.7 1.1 29.9 2.7 0.8 0.7 1.2 Hungary 20.4 1.8 0.5 0.5 0.8 22.1 2.0 0.6 0.5 0.9 Ireland 35.8 3.7 1.1 0.9 1.7 36.6 3.8 1.1 1.0 1.7 Italy 201.0 21.7 6.1 4.4 11.0 196.5 21.4 6.0 4.3 10.9 Netherlands 76.1 11.0 3.1 2.2 5.6 76.2 11.0 3.1 2.2 5.6 Norway 41.8 4.3 1.3 1.1 1.9 41.0 4.3 1.3 1.1 1.9 Poland 68.6 6.5 1.9 1.6 2.9 69.4 6.7 2.0 1.7 2.9 Portugal 28.9 2.7 0.8 0.7 1.2 29.0 2.8 0.8 0.7 1.3 Romania 34.8 3.0 0.9 0.8 1.3 35.4 3.0 0.9 0.8 1.3 Spain 138.0 14.1 4.0 2.9 7.1 138.4 14.3 4.0 2.9 7.3 Sweden 44.6 4.8 1.4 1.2 2.2 44.3 4.8 1.4 1.2 2.2 Switzerland 62.6 6.6 1.9 1.7 2.9 63.0 6.7 2.0 1.7 2.9 United Kingdom 247.9 26.5 7.5 5.4 13.3 247.9 26.8 7.6 5.4 13.5 Europe-Others 86.3 7.6 2.4 2.3 2.9 88.0 8.0 2.4 2.3 3.3 Europe Total 1,907.3 200.9 57.8 44.3 97.2 1,904.4 202.7 58.4 44.5 98.2 Iran 73.3 5.8 1.7 1.5 2.6 78.5 6.3 1.9 1.6 2.7 Israel 41.8 4.1 1.2 1.0 1.9 43.1 4.2 1.2 1.1 1.9 Pakistan 48.8 4.0 1.2 1.0 1.8 43.4 3.6 1.1 0.9 1.6 Saudi Arabia 101.7 9.2 2.7 2.3 4.1 99.1 9.0 2.7 2.3 3.9 Turkey 95.0 8.8 2.6 2.2 3.9 87.6 8.2 2.4 2.1 3.6 United Arab Emirates 42.5 4.3 1.3 1.1 1.9 42.8 4.4 1.3 1.1 2.0 Middle East-Others 123.2 10.0 3.0 2.6 4.4 123.3 10.4 3.1 2.8 4.5 Middle East Total 526.3 46.2 13.7 11.7 20.6 517.8 46.1 13.7 11.9 20.2 Canada 154.0 16.0 4.7 4.0 7.2 156.5 16.4 4.8 4.1 7.4 Mexico 146.8 15.6 4.5 3.9 7.1 149.0 15.9 4.6 4.0 7.2 United States 1,639.5 213.5 61.9 43.3 104.9 1,707.6 227.2 66.2 45.9 111.6 North America-Others 77.3 6.4 2.0 1.9 2.5 79.6 6.7 2.0 1.9 2.8 North America Total 2,017.6 251.5 73.1 53.1 121.7 2,092.7 266.2 77.6 55.9 129.0 United States 1,639.5 213.5 61.9 43.3 104.9 1,707.6 227.2 66.2 45.9 111.6 North America-Others 77.3 6.4 2.0 1.9 2.5 79.6 6.7 2.0 1.9 2.8 North America Total 2,017.6 251.5 73.1 53.1 121.7 2,092.7 266.2 77.6 55.9 129.0 Argentina 62.2 5.7 1.7 1.4 2.6 57.3 5.3 1.6 1.3 2.4 Brazil 216.7 19.9 5.9 5.0 8.8 227.4 21.1 6.2 5.3 9.4 Chile 34.3 3.3 1.0 0.8 1.5 34.0 3.3 1.0 0.8 1.5 Colombia 41.6 3.5 1.0 0.9 1.6 42.1 3.6 1.1 0.9 1.6 Peru 28.2 2.4 0.7 0.6 1.1 29.0 2.5 0.7 0.6 1.2 Venezuela 11.7 0.8 0.2 0.2 0.4 9.1 0.7 0.2 0.2 0.3 South America-Others 40.0 3.0 0.8 0.7 1.5 40.6 3.4 0.9 0.8 1.7 South America Total 434.7 38.6 11.3 9.6 17.5 439.5 39.9 11.7 9.9 18.1 Grand Total 9,246.6 950.7 277.4 223.9 440.9 9,538.5 994.6 291.5 234.1 459.9 Sources: International Monetary Fund, Australian Logistics Council, NESDB, Vietnam Business Forum, Logistics Viewpoints and Indonesia Investment, and Armstrong & Associates, Inc. Databases

Table 5. Top 50 Global 3PLs by Gross Revenue*

2018 Gross Revenue Rank Provider (US$ Millions) 1 DHL Supply Chain & Global Forwarding 28,120 2 Kuehne + Nagel 25,320 3 DB Schenker 19,968 4 Nippon Express 18,781 5 C.H. Robinson 16,631 6 DSV 12,411 7 XPO Logistics 10,850 8 Sinotrans 10,174 9 UPS Supply Chain Solutions 9,814 10 J.B. Hunt (JBI, DCS & ICS) 8,214 11 Expeditors 8,138 12 DACHSER 7,602 13 CEVA Logistics 7,356 14 GEODIS 6,645 15 Hitachi Transport System 6,283 16 Panalpina 6,156 17 Damco/Maersk Logistics 6,082 18 Toll Group 5,980 19 CJ Logistics 5,618 20 Bolloré Logistics 5,415 21 Kintetsu World Express 5,310 22 GEFCO 5,035 23 Kerry Logistics 4,875 24 Yusen Logistics/NYK Logistics 4,715 25 Agility 4,400 26 Coyote Logistics 4,000 27 Imperial Logistics 3,852 28 Ryder Supply Chain Solutions 3,731 29 Hub Group 3,684 30 Hellmann Worldwide Logistics 3,646 31 Total Quality Logistics 3,643 32 FedEx Logistics 3,170 33 Burris Logistics 3,022 34 Transplace 2,886 35 Schneider Logistics & Dedicated 2,711 36 Sankyu 2,639 37 Landstar 2,542 38 Echo Global Logistics 2,440 39 Penske Logistics 2,300 40 Transportation Insight 2,290 41 Mainfreight 2,110 42 NFI 2,000 43 Groupe CAT 1,990 44 Fiege Logistik 1,815 45 APL Logistics 1,766 46 ID Logistics Group 1,651 47 Worldwide Express/Unishippers 1,650 48 Americold 1,595 49 BDP International 1,552 50 Knight-Swift Transportation 1,550 *Revenues are company reported or Armstrong & Associates, Inc. estimates and have been converted to US$ using the average annual exchange rate in order to make non-currency related growth comparisons.

Not much has changed in the ranks of the first 15 global players compared to last year. XPO (U.S.) and Sinotrans (China) switched spots with one another as well as J.B. Hunt (U.S.) and CEVA (Switzerland) making J.B. Hunt a Top 10 global 3PL in addition to its unwavering top DCC spot. Damco (Netherlands), combined with Maersk’s logistics operations, climbed 15 spots to rank 17th this year. Yusen Logistics (Japan), although combined with NYK’s logistics operations as well, held its 24th place rank this year.

U.S.-based companies (22) make up the majority (44%) of our Top 50 Global 3PLs list this year. Japan (5), Germany (5) and France-based (5) companies account for 30%. Swiss companies (3) are 6% and 10 other countries round out the list.

Figure 5. Number of Top 50 Global 3PLs by Country

Australia, China, Denmark, Hong Kong, Kuwait, Netherland, New Zealand, United States, 22 Singapore, South Africa, South Korea, 1 each

Switzerland, 3

France, 5

Germany, 5 Japan, 5

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