3PL Perspectives
TIA OFFERS A wide range of services, education, products, and tools for its members, and is focused on helping its members grow, protect their businesses, stay connected, promote high standards of ethics, and advocate for them on regulations that impact our industry.
The COVID-19 pandemic has had a dramatic effect on global supply chains. Logistics companies have experienced dramatic shifts of freight demand from low to high, capacity challenges, market cost swings and labor shortages across the board. It’s difficult to determine if this is the new normal, or if we will return to a more predictable environment.
These changes have had a dramatic impact on the metrics many TIA Members utilize to manage their business. With dramatic change, there is a greater need to understand what is happening in the marketplace and how to measure your performance.
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Now, more than ever, TIA is in a unique position to help members benchmark performance through the TIA 3PL Market Report. Created using more than a decade of data, metrics, and trends, the 3PL Market Report is a powerful tool for navigating performance, especially through uncertain times.
This past December, Indeed.com issued an article that highlights the importance of benchmarking.1 They commented that benchmarking is common and refers to a practice that allows a company to compare its products, operations, and processes to other companies.
They developed the top 7 reasons benchmarking is important for business.
- Increase effectiveness and efficiency
- Set clear business goals
- Provide new opportunity for discovery
- Increase business sales performance
- Motivate employees
- Better understand the competition
- Improve quality of product
The TIA 3PL Market Report is unique in many ways. It collects data from TIA Members, is secure, trusted, and is clearly defined, so we understand what is being measured. The data is aggregated to create overall market trends that are easy for any TIA Member to benchmark.
Very simply, the TIA 3PL Market Report was designed by TIA members for TIA Members to help them benchmark. It contains exclusive data that helps owners, executives, all levels of leadership and employee teams understand how you are performing compared to the market.
Perhaps the most important aspect of the 3PL Market Report is that it is the only source any TIA Member or industry analyst can find that clearly measures key metrics that ultimately drive 3PL performance. The data in the report is not found in public logistics companies earnings releases, or in any analyst or economist reporting.
The process to participate is very simple, and there are two options for submitting data. One: If your company TMS system is McLeod Software, the platform has a built-in option to automatically share your data. Two: If your company is not a McLeod TMS user, data would be submitted monthly on the secure TIA website once your company is registered to participate.
Once participants begin submitting their data. they receive monthly and quarterly reports. Both reports aggregate the data into small-, medium-, and large-company size. This allows you to compare your company’s performance to peers of your relative size or the overall market. Within those groups are performance metrics for shipment count, total revenue, revenue per shipment, margin per shipment, and margin percent by service or mode. Examples: Truckload, Intermodal and LTL performance is reported with the metrics just mentioned.
The monthly reports are an aggregation of the data for that month. Example: truckload revenue per shipment was $2,500 for the month. This report is more tabular featuring an array of monthly data on a number of industry sectors, while the quarterly report encompasses more than 30 pages of insight and information, including additional data from TIA economist, Noël Perry, and previous quarter trends. In addition, the quarterly report also measures year-over-year and sequential quarterly performance. It is designed to give you an overall picture of the market, what happened, and what likely caused changes in performance.
Below are a couple of key metrics from the Q4 2021 report and focus on Truckload as it is the largest service offered by TIA members. The first chart is the previous eight quarters performance of Invoice Amount per Shipment and Gross Margin percent. Despite the steady increase of invoice per shipment in 2021, gross margin percent was below 2020.
As the second chart shows, Q421 performance across all metrics saw a year-over-year increase.
The two charts are just a sample of the data available in the 3PL Market Report. The report includes additional commentary that provides insight into what is contributing to market changes, and how to you can continue to maximize your business performance.
During the past decade, TIA has continued to enhance the report and is brainstorming additional ideas to prepare for the future. As our industry changes, we understand benchmarking needs to evolve. The Market Report committee welcomes ideas to help make this report even more valuable for you.
To participate in the 3PL Market Report, please contact Cindy Amos at [email protected], who will assist in setting up and reviewing the process with your team. Once setup, you will automatically get all the reports and be able to get insight on what is driving performance for our industry.
Our industry has never been stronger. Carriers and shippers are relying on logistics companies more than ever to help them manage the challenges in the supply chain. TIA and its members are playing a large role in that success, and we look forward to future success.
Image credit: STEKLO/SHUTTERSTOCK.COM
