The U.S. third-party logistics market is projected to see strong revenue growth in 2025, with reports indicating that the freight recession is nearing its end.

U.S. Third-Party Logistics Market Sees Strong Revenue Growth in 2025, Freight Recession Nearing Its End

The U.S. third-party logistics (3PL) market continued its rebound in 2025, building on momentum from 2024. According to the latest report from supply chain consulting firm Armstrong & Associates, titled *Reshaping: Third-Party Logistics in a Decade of Structural Change*, net revenue (total revenue minus purchased transportation costs) for the U.S. 3PL market grew 5.1% year-over-year in 2025, reaching $138.2 billion—a significant acceleration from the 1.8% increase recorded in 2024.

The report shows that total 3PL market revenue rose 5.0% year-over-year in 2025, reaching $323.4 billion (including $4.5 billion in contract logistics software revenue). All four major segments—Dedicated Contract Carriage (DCC), Value-Added Warehousing & Distribution (VAWD), International Transportation Management (ITM), and Domestic Transportation Management (DTM)—posted growth. Evan Armstrong, President of Armstrong & Associates, noted that this growth trajectory confirms the freight recession that began in late 2022 is nearing its end, with growth expected to continue through 2027.

Segment Performance

• Domestic Transportation Management (DTM): Total revenue of $128.3 billion, up 4.5% year-over-year; net revenue of $19.6 billion, up 3.0%.
• International Transportation Management (ITM): Total revenue of $85.9 billion, up 7.7% year-over-year; net revenue of $30.4 billion, up 11.0%.
• Dedicated Contract Carriage (DCC): Total revenue of $32.0 billion, up 1.6% year-over-year; net revenue of $32.0 billion, up 2.5%.
• Value-Added Warehousing & Distribution (VAWD): Total revenue of $72.7 billion, up 4.4% year-over-year; net revenue of $56.1 billion, up 4.4%.

Growth Drivers

Armstrong pointed out that the repeated fluctuations in tariff policies in 2025 benefited the International Transportation Management segment. Following the U.S. Supreme Court's ruling on the International Emergency Economic Powers Act (IEEPA), the current average global tariff rate is approximately 11%, which remains manageable. The increased complexity arising from tariff adjustments has created business opportunities for customs and brokerage departments at freight forwarding companies.

In the domestic transportation sector, capacity continues to tighten due to a large number of trucking company closures and some carriers being unable to pay insurance premiums, which benefits freight brokerage operations. Armstrong explained: "When capacity is tight, shippers turn more to freight brokers; when capacity is abundant, shippers can directly seek out carriers. The current tight capacity situation favors brokers and drives significant growth." He expects full-year 2025 freight brokerage business to maintain solid growth, influenced by the Montgomery ruling and carrier audit requirements.

Warehousing Market Stabilizes## Warehouse Market Stabilizing

The report points out that warehouse vacancy rates are stabilizing and rent growth is slowing. As tariff adjustments lead to changes in tenant demand, the market is rebalancing after experiencing "extreme tightness" in 2021-2022. Despite economic uncertainties, demand for warehouse space remains steady. Demand for large warehouses over 500,000 square feet has surged, with e-commerce 3PL companies, manufacturers, and data center tenants all competing for the same type of industrial space.

2026 Outlook

Armstrong expects total U.S. 3PL revenue to continue growing by 5.6% in 2026, reaching $336.9 billion. The outlook for each segment is as follows: DTM leads with the highest growth rate of 8.3%, with projected revenue of $139.0 billion; ITM grows by 4.1% to $89.4 billion; DCC and VAWD each grow by 3.5%, reaching $75.2 billion each. Armstrong stated: "Due to the possible ceasefire agreement in the Iran conflict, growth in ocean and air freight forwarding will slow. Meanwhile, DTM is expected to lead gains driven by capacity tightness and a Supreme Court ruling."