5PL solutions are made up with the combination of 3PL solution that enables the process of outsourcing of transportation resources and 4PL solution that defines a concept of lead logistics integrator.
5PL solutions have made the businesses to realize more opportunity to alternative business models through the concrete integration of consumer-centered demands and economic logistics solutions in their service portfolio, to achieve positive sustainability effects.
5PL solutions are used to organize, plan, and implement logistics solutions for contract organizations focused on using the advanced technologies such as logistics automation and IoT.
Accordingly, logistics coordination mechanisms and joint decision-making are integrated to achieve more sustainable supply chain configurations. 5PL solutions are based on information technology (IT) infrastructure that requires new technology of management considering the principles of group behavior and self-organization.
The COVID-19 pandemic has impacted the logistics sector to a great extent. The economic crisis resulted due to lockdowns and temporary production halts, has off-tracked the entire industrial supply chains across various industries.
Weakening manufacturing confidence and low demand for raw materials and commodities are heightening the uncertainty for the logistics market. The industry's concern has moved on from being centered on supply chain disruption from China to the overall slump in demand for industrial products.
Furthermore, changes in consumer buying behavior owing to uncertainty surrounding the pandemic may have serious implications on the near future growth of the 5PL solutions market. Owing to the spreading of COVID-19 virus across all regions, the 5PL solution market is expected to decline by 4-5% by the end of year 2020.
However, the market is projected to return to a steady growth by the end of 2021. Governments and logistics associations are focusing on providing 5PL solutions for freight transport, inventory management, storage, materials handling and all the logistic related operations, in a way that meets customer demands at optimal cost, to ensure the market recovery.
The demand for 5PL solutions is increasing globally, due to rising national and international trade agreements. Also, the adoption of key technologies such as IoT, Blockchain, AI/ML, Big Data & Analytics, is driving the need for digital transformations within the logistics sector.
The growing free trade activities across nations, is providing new avenues for manufacturers to enter developed and developing economies. Such trade practices are projected to stimulate the growth of various manufacturing sectors including electronics, automotive, industrial manufacturing and others, which will further assist in fueling the growth of 5PL solutions.
Moreover, the growing internet penetration, m-commerce penetration, and e-commerce growth, are expected to increase the demand for the 5PL solutions market during the coming years. The 5PL solutions offer different features such as multimodal logistics, facilitating the smooth and efficient transportation, and offering complete security and transparency. The reliability of such a features are driving the 5PL solutions market growth.
The stringent government regulations in logistics and transportation sector is hampering the 5PL solution market growth. Also, the high initial investment required for procuring 5PL solutions and high operational costs, acts as a challenge for the global 5PL solutions market in the coming future.
Some of the prominent players providing 5PL Solutions are
These players have adopted key strategies like partnering with local vendors, to strengthen their supply chain offerings. Moreover, the players are also doing upgrades to the existing logistics solutions, to integrate emerging technologies like IoT, Blockchain, AI and others, to enhance their solution capabilities
Based on the regional trade landscape, the adoption of the 5PL solutions fluctuate across various geographical regions. The global 5PL solutions market is anticipated to be led by the Europe region and is expected to continue its dominance over the forecast years, due to the rising free trade agreements in Europe.
However, the 5PL solutions in East Asia is witnessing high growth, owing to increasing manufacturing productions for electronics, automotive, semiconductor components, enabling high demand for 5PL logistics solutions. The 5PL solutions market report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, and inputs from industry experts and industry participants across the value chain.
The report provides in-depth analysis of parent market trends, macro-economic indicators, and governing factors, along with market attractiveness as per segment. The 5PL solutions market report also maps the qualitative impact of various market factors on market segments and geographies.
The 5PL solutions market has been segmented on the basis of type, application, and region.
Basis of Types:
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