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Jan.9, 2017

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114 THE JOURNAL OF COMMERCE JANUARY 9.2017 2017 ANNUAL REVIEW & OUTLOOK & OUTLOOK & LOGISTICS BY ALAN M. FIELD Logistics What to watch for in 2017 Fate of Trade Pacts 3PL Acquisitions Industrial Real Estate Boom A er a rocky 2016, 3PLs face a year of uncertainty when President Trump takes on trade and infrastructure F or third-party logistics provid- ers, 2016 will prove a year of overall slow growth that sets the stage for one of the more unpre- dictable years in recent memory. When all 2016 data is in, overall gross revenue likely will show 4.2 percent growth, to $168 billion, according to estimates from Wisconsin-based supply chain research fi rm Armstrong & Associates. Domestic transportation manage- ment, including freight brokerage and non-asset activity, is the fastest-grow- ing segment of the market, and was on pace to increase revenue by 8.4 percent, to nearly $10.4 billion in 2016, accord- ing to A&A President Evan Armstrong. He expects 2016 to show much slower growth for other areas: 4 percent for dedicated contract carriage, 3.2 per- cent in software activity, 2.4 percent in value-added warehousing and distribu- tion, and just 2 percent for international transportation. "We still see room for growth in DTM, helping customers ma nage multiple modes (and) optimizing trans- portation networks," Armstrong said. But 2016's 8.4 percent growth fi gure for domestic transportation management is lower than in the strongest recent growth years of 2013 and 2014, primar- ily because of the abundant capacity in the market, he added. "There are plent y of carriers to handle loads, and we (didn't see) a ton of tightening" during the holiday peak season, Armstrong said. On the international side, overca- pacity is even more dramatic, especially on the ocean side and even with Hanjin Shipping's August collapse. "And there is also a lot of capacity on the air freight side, even though there a re some strikes going on (including December's Lufthansa pilots' walkout) that will probably have some impact at Ama- zon and others," he said. "Still, there is overcapacity, so large shippers can A er a rocky 2016, MYSTERY AND MYSTIQUE

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