Transportation Intermediaries Association

The two most important challenges for the third-party logistics industry in 2009 will come from the economy and government. The economy will challenge all companies. The downturn in automobile manufacturing and housing and the slow retail season have reduced the number of loads. The decrease in loads and the oversupply of equipment create pricing challenges between shippers wanting lower rates and carriers needing to meet higher costs. Many 3PLs have seen their margins reduced as a result. We believe 3PLs that are conservative with their resources, and that invest in their people, knowledge and technology will weather the storm nicely. Government regulation is a serious concern. In the last Congress, legislation was introduced, under the guise of fuel surcharge relief, that would have led to a return to economic regulation. Specifically, the legislation would have required every broker, forwarder and carrier to list its income, expenses and margins on every load. We believe the ultimate goal of this legislation was to introduce regulation of margins. Another government regulation of concern to 3PLs is Customs and Border Protection’s Customs-Trade Partnership Against Terrorism. This voluntary government program designed to enhance cross-border security excludes brokers and forwarders licensed by the Department of Transportation. Customs cannot give a reason for this artificial barrier. The result, however, is that the government is picking winners and losers among 3PLs. The TIA is fighting to correct this wrong.