A new report recently issued by Brookfield, Wisc.-based supply chain consultancy Armstrong & Associates takes a deep dive into the rationale behind why large shippers leverage 3PLs (third-party logistics) to outsource logistics operations.
The report, entitled “Convergence: Trends in 3PL/Customer Relationships—2026,” is based on the company’s proprietary database, comprised of more than 8,404 3PL customer relationships throughout 46 countries and 22,000 individual services, in a market that hit an estimated $1.3 trillion in 2025 and is pegged to come in around $1.4 trillion in 2026.
One of the biggest takeaways of the report addressed how 94% of domestic Fortune 500 companies work with at least one 3PL, marking a 46% rise compared to 2001, with U.S. 3PL revenues estimated to hit $424.3 billion in 2025.
The report explained that this significant growth rate over a 25-year period signals “that future growth will increasingly come from deeper service integration, geographic expansion, and penetration into mid-market segments.”
Digital freight brokers were highlighted in the report and are helping to “reshape the middle,” with the report observing that technology-forward intermediaries like Arrive Logistics and RXO, among others, are continuing to pressure traditional brokerage models by trading margin for productivity and scale, with shippers taking steps to rationalize their 3PL bases.
“The digital freight brokerage segment seems to be doing well and is capacity-driven, currently benefiting from capacity that has exited the market,” said Evan Armstrong, president of Armstrong & Associates. “It is not like demand is going through the roof, but it is pretty solid, especially for infrastructure-related demand tied to the infrastructure spending bill and things like that. A lot of flatbed demand has been pretty substantial, too. If you look at carrier revocations over the past few years and what happened from 2023 into 2024 and into 2025, and the net loss of carriers, we are on pretty solid footing in terms of supply and demand. It is a good year for Domestic Transportation Management (DTM) and freight brokerage.”
From a growth perspective by sector, the report found that technology, retail, and healthcare were the pacesetters, posting compound annual growth rates of 8.7%, 7.9%, and 7.7%, respectively, paced by AI and cloud buildout, e-commerce-driven fulfillment, and sustained expansion of cold-chain logistics biopharma. The automotive sector also has a high share of 3PL penetration but is dealing with various challenges, noted the report, including structural headwinds from the costly transition to electric vehicles, Chinese competitive pressures, trade disputes, and other factors.
3PLs that tend to be good in automotive also tend to be good in high-tech and healthcare, explained Armstrong.
“They work with a lot of serialized types of products and also pick-and-pack operations,” he said. “It also applies to manufacturing line-type operations, as well as spare and service parts logistics. On the healthcare side, there is a lot of serialization to avoid counterfeiting of different pharmaceuticals. 3PLs that grew up in automotive, like Penske and Ryder, tend to have pretty good relationships on the high-tech side and also some penetration into healthcare. Those verticals go together pretty well, whereas retail tends to align more with food, grocery, and consumer.”
Retail e-commerce logistics, he said, leverages pick-and-pack operations as well, while being a little different from traditional import deconsolidation shippers’ distribution centers for B2B business, with the retail side seeing the most activity in e-commerce.
“Everybody orders from Amazon, and it was not on our top 3PL lists 10 years ago, and now it is the largest 3PL globally,” said Armstrong.
Looking at value-added services, the report observed that these providers are different from what it called transactional transportation companies and basic warehousing operations, adding that, going back to 1995, there has been an increase in the degree and clustering of these services.
“The global reach of major 3PLs has expanded considerably, driven in large part by strategic acquisitions that have extended operational coverage across countries representing the majority of world GDP,” the report noted. “However, this growth through acquisition brings with it an ongoing challenge: integrating disparate operational systems, processes, and cultures into a cohesive service offering. Approximately 18 3PLs have now achieved the network scale necessary to deliver single-source global solutions to large multinational corporations. These Global Supply Chain Managers (GSCMs) are positioned to become increasingly dominant as shipper demand for consolidated, cross-border logistics management intensifies.”
From a contractual perspective, the report pointed out that net revenues for 3PL engagements see a lot of variation, ranging from a few hundred thousand to more than $500 million per account, adding that contracts with Fortune 100 companies often top $50 million annually, with the larger ones often in automotive and technology.
Armstrong noted that, for large accounts coming in at more than $100 million, those often see a fair amount of subcontracting, with a Leading Logistics Provider managing other 3PLs.
“These accounts tend to be very integrated and very strategic in terms of overall relationships, but that is a smaller percentage, because smaller, mid-size shippers are just using 3PLs for transportation management or warehouse management, and fewer services per relationship,” he said. “There is bifurcation there, with the very large shippers working with a lot of 3PLs. Volkswagen, for example, works with 74 different 3PLs. A lot of the very big shippers with big contracts are going to work with 3PLs very strategically and then have a bunch of subcontracted 3PLs underneath them.”
