Insights From the 2024 Harris Williams 3PL Conference

Harris Williams recently hosted its annual Third-Party Logistics (3PL) Conference, bringing together transportation and logistics executives, noted thought leaders, and private equity investors to network, share perspectives, and engage in relevant and timely sessions and panel discussions.

Below, senior professionals from our Transportation & Logistics Group highlight key insights into the current and future state of the 3PL space drawn from sessions, conversations, keynote speakers, and presenters at this year’s event.

• Jack of All Trades: Guidance on Global Trade Dynamics (Keynote)
• 3PLs: Winning in a Dynamic Environment
• Taking the Cycle Out of Freight
• Washington Update: An Insider’s View From Our Nation’s Capital
• Growing Cross-Border and Near-Shoring Activity

Jack of All Trades: Guidance on Global Trade Dynamics (Keynote)

Ezra Greenberg, Partner, McKinsey & Company
John Murnane, Senior Partner, McKinsey & Company

To kick off the event, Ezra Greenberg and John Murnane from McKinsey & Company led a discussion on the direction of U.S. policy and its impact on trade. Greenberg and Murnane shared their perspectives on global trade dynamics, including trade lane projections, key trends like near-shoring and friend-shoring (expanding networks to include countries regarded as economic allies), and the logistics market's long-term outlook.

“The session’s data and commentary centered on the U.S. economy’s resilience despite economic uncertainty, with GDP growth continuing at a healthy rate and interest rates falling,” says Frank Mountcastle, a managing director and co-head of the Transportation & Logistics Group.

The session also highlighted some seeming contradictions in the current economic climate. “Even with uneven consumer confidence, wages have actually gone up more than inflation,” says Jeff Kidd, a managing director. “That’s also true of wages in transportation and warehousing: They’ve generally risen more than freight rates, which explains some of the pressure carriers have been feeling.”

In fact, data shared by Greenberg and Murnane shows more than 27% growth in private-sector wages versus December 2019. This is even higher in transport and warehousing, which has seen nearly 30% wage growth during that period.ᶦ And while overall trucking operating costs (inclusive of wage impacts) per mile have risen by more than 24% since 2019, the trucking spot-rate per mile has only grown by 3%.ᶦᶦ

A few key factors further contribute to the challenges currently facing the industry. One is relatively soft demand for products requiring shipping, specifically branded packaged goods and durable items purchased during COVID-19. The slowdown in home sales has also impacted demand for products associated with moving, such as appliances, furnishings, and renovation and remodeling supplies.

Another factor is the incremental shipping capacity carriers have invested in to help avoid future supply chain crises like the one we experienced as the pandemic abated. As shown in data shared by McKinsey, motor carrier active registrations have increased 27% since the fourth quarter of 2019, compared to only 2% growth in volume.ᶦᶦᶦ “Demand for shipping has not quite kept up with this growth in supply, especially in ground freight,” notes Kidd.

In spite of these factors, Greenberg and Murnane highlighted data showing strong underlying microeconomic fundamentals, including healthy consumer savings rates and generally strong confidence regarding consumers’ personal financial situations. “It’s the macroeconomy and political environment consumers are worried about,” says Jason Bass, a managing director and co-head of the Transportation & Logistics Group. “The data shows that they feel good about their jobs, their income is rising, and they have cash in the bank."

At a high level, the speakers suggested focusing on improving productivity and margins through technology, process innovation, and automation, all of which can help offset rising labor costs. And, in an industry with some excess capacity and plenty of fragmentation, strategic M&A can help more sophisticated operators add scale and capabilities while generating greater value for customers and winning share. With the U.S. economy and logistics market showing strong fundamentals, innovative 3PLs are well positioned to take advantage of this opportunity.

3PLs: Winning in a Dynamic Environment

Arsenio Martinez-Simon, Partner, McKinsey & Company
Cameron Ramsdell, CEO, Armstrong Transport Group
Hans Stig Moller, CEO, Odyssey Logistics
Willis Weirich, EVP & Chief Supply Chain Officer, SRS Distribution Inc.
Mark Yeager, CEO, Redwood Logistics

This panel of thought-leading 3PL executives and supply chain industry participants focused on key shifts for successfully managing today’s uncertain landscape, including increasing supply chain management maturation among shippers and across the industry. “In the wake of pandemic-driven supply chain disruptions, businesses are increasingly elevating shipping decisions to the C-suite, leveraging technology and other resources to optimize moves, spending, reliability, sustainability, performance, and on-time delivery,” adds Kidd.

While panelists noted that using technology to capture and analyze data is critical in driving efficiencies and adding value to customers, they also pointed out the importance of using that data to develop and execute strategic plans. “3PLs are playing a larger role in helping shippers make sense of their data and turn insights into actionable strategies,” says Jon Meredith, a director. “While significant investment had been made in the space, the logistics industry as a whole likely remains underinvested in technology, creating opportunities for more sophisticated providers to develop new tech-driven capabilities and bring more value to their shipper customers.”

The panelists also discussed their approaches to the current supply chain environment and freight markets, noting a mix of temporary "micro shocks" and broader macro trends like oversupply and uncertain demand. Labor and talent challenges remain important factors as well, with many 3PLs focusing on creating a positive work culture and career development opportunities to attract and keep top talent. In particular, companies are building diverse talent pools, emphasizing career development, and fostering positive work cultures to recruit and retain key personnel.

Finally, panelists were cautiously optimistic about the market improving in the second half of 2025 but acknowledged difficulty in accurately forecasting the timing and pace of the recovery. “Optimism is high regarding the long-term prospects for the 3PL space,” says Kidd. “The winners will take advantage of improving conditions by investing in their people and technology today.”

Taking the Cycle Out of Freight

Trent Broberg, CEO, ACERTUS
Joel Clum, COO, WWEX Group
Luis Erana, CEO, Alba Wheels Up International
Keith Tholan, President & COO, AIT Worldwide Logistics

In this session, a panel of 3PL leaders unpacked views on the perceived cyclicality within the freight market, the differentiation opportunities these dynamics create, and how companies can position themselves to be more resilient to broader market fluctuations.

One of the core themes was diversifying the business across different transportation modes, geographies, go-to-market channels, and customer verticals. This can reduce exposure to any single cycle while taking advantage of select counter-cyclical avenues. “Panelists discussed the balance between ‘sticking to your knitting’ and exploring sensible adjacencies to generate more customer value while insulating themselves from or capitalizing on movements within select markets,” says Bass.

Another theme was the importance of solidifying the existing business foundation during down cycles through select internal and external initiatives. Specifically, panelists emphasized business process optimization and simplification, increasing customer engagement and delivering an optimized value proposition, and offering more comprehensive services and solutions. Panelists also suggested cultivating a culture that emphasizes employee training, development, and partnership to help build a resilient and focused workforce.

Relatedly, several panelists noted the value of using data and analytics to better understand and predict industry trends and customer needs. “The best 3PLs are interacting with customers in good times and bad,” says Mountcastle. “When the market’s strong, they’re helping shippers find capacity. When things are tough, they’re focused on cost savings and helping their customers weather the storm. Many are leveraging their CRM platforms to more deeply understand what customers need at any moment in time.”

Panelists also discussed the importance of making strategic acquisitions and investments during volatile periods to expand capabilities and make life easier for customers. “One panelist pointed out that the keys to winning in uncertain times are being the easiest to work with and offering the value proposition that best matches customer demand,” says Bass. “To the extent thoughtful M&A enhances services portfolios and fosters better customer partnerships, external acquisitions can drive significant platform value.”

Overall, the panelists emphasized the importance of discipline, focus, and a long-term view when navigating the cyclical nature of the freight transportation industry—all of which will help 3PLs generate greater customer value and build businesses that last.

Washington Update: An Insider’s View From Our Nation’s Capital   

Farrukh Bezar, Operating Advisor, Littlejohn & Co.
Ray LaHood, Former United States Secretary of Transportation

This especially timely session included an in-depth discussion on the role of government in transportation infrastructure, the continuity of transportation policies across changes in political leadership, and the potential implications of the 2024 U.S. presidential election on transportation regulations and investment.

“Overall, the conversation focused on how the Department of Transportation and other federal agencies would work hard to implement the policies laid out by either presidential candidate,” says Bass.

The key differences noted in each candidate’s likely policy strategy involve issues like high-speed rail, investment in ports, and the relationship between the U.S. and Mexico—all areas that could see significant change under a Trump administration. The adoption of electric vehicles and sustainability initiatives could also be impacted, with a Trump administration potentially scaling back regulations and incentives in these areas. On energy and sustainability, a Trump administration would likely be more focused on traditional energy sources like oil and gas.

The conversation also included a discussion of the historic $1 trillion transportation bill passed by the Biden administration and Congress, which will enable significant investment across all transportation modes. “This funding will continue to be spread over every mode of transportation, and it will create many opportunities to get involved in infrastructure investing,” Bass says. “The federal government recognizes that transportation and supply chains are integral parts of our domestic and international economy, and that investing in them will drive opportunities for our economy as a whole.”

Growing Cross-Border and Near-Shoring Activity

Ken Kellaway, Co-Founder, President & CEO, RoadOne IntermodaLogistics
John Leach, CEO, FLS Transportation
Lance Malesh, President & CEO, MODE Global
Parker Stallard, President, Argus Logistics

In the final session of our event, a panel of 3PL leaders shared their perspectives on how rising cross-border trade and near-shore operations will affect 3PLs and their carrier and client relationships, with a specific focus on Mexico.

“The nearshoring trend has accelerated in recent years, with certain industries like automotive and high-tech moving more manufacturing to Mexico,” says Nick Petrick, a director. “The supply chain disruptions sparked by COVID and exacerbated by global geopolitical volatility are a major factor behind this shift."

However, shifting more manufacturing to Mexico is complex and fraught with challenges of its own, said panelists, and presents hurdles to fully replacing China and Asia as a manufacturing hub. Major considerations around nearshoring to Mexico include infrastructure investment, corruption and security issues, incrementally more expensive labor, regulatory differences, and the imbalance of trade flows leading to equipment repositioning challenges.

“There’s a relative lack of capacity and infrastructure at key border crossings and on both sides of the border to handle growing trade volumes,” says Bass. “Panelists also mentioned the risks of theft and organized crime; differences in labor regulations, driver safety rules, and drug testing policies compared to the U.S.; and Mexico’s relative lack of labor and manufacturing capabilities compared to China.”

Leading 3PLs are taking a range of approaches to address these challenges, from building local expertise and partnerships in Mexico, to pursuing M&A opportunities and joint ventures, to educating customers on the unique aspects of operating in the Mexico-US cross-border environment.

“Overall, the panelists see significant ongoing opportunities in the Mexico-U.S. trade corridor, but also recognize the need to carefully navigate the complexities and risks to successfully execute nearshoring strategies,” says Petrick.

Unlocking Growth and Innovation

The world is not getting any less complex or dynamic, creating an opportunity for forward-looking 3PLs to pull ahead by embracing change and uncertainty. As the rich and engaged discussions at this year’s annual Harris Williams 3PL Conference make clear, focusing on customer value and core strengths will be essential to taking full advantage of this opportunity.

“3PLs play a key role in the global economy, and the executives we assembled in Nashville this year are a testament to the value they can provide to their customers, employees, and communities,” says Bass. “As conditions continue to improve, we’re excited to witness the growth and innovation these important businesses will unlock."

To discuss M&A opportunities across the 3PL space in detail, please contact our senior professionals.

1. Source: BLS, McKinsey analysis

2. Source: DAT, ATRI, Morgan Stanley, Bureau of Labor Statistics, U.S. Census, EIA, McKinsey

3. Source: Federal Motor Carrier Safety Administration, BLS, Jason Miller, Ph.D. (Michigan State University), JOC