The third party logistics services market is currently valued at USD 1036.08 Billion in the year 2022. It is estimated to record a CAGR of 8.6% from the year 2022 to 2032. It is expected to reach a valuation of USD 1128.44 Billion owing to the increasing network of supply chain and logistics.
Globalization has played a vital role in boosting the growth of 3pl companies. The worldwide spread of the manufacturing network needs a reliable and safe way to deliver or stock their products.
The advancement in information technology has contributed to the growth as it provides reliability and is cost-effective. In order to give tough competition in the market, 3pl companies can provide services like short-term/long-term warehousing, cross-country freight, insurance etc.
The ‘amazon effect’, which basically refers to digitalization and eCommerce, has affected the market positively as companies need a strong network of suppliers and safe warehousing.
The companies are stressing providing technology-driven services, such as route optimization and real-time shipment tracking. The companies are also trying to maintain complete visibility over the entire supply chain without overburdening the clients.
The strengthening of shipper-carrier relationships increases information sharing and transparency among both parties, creating a favourable business environment. The market is witnessing strong M&A activities over the last several years. Key companies are also engaging in partnerships, mergers, and acquisitions with small- and medium-sized companies to leverage their regional capabilities.
The 3pl market also brings some risks to the producers. As there is little or no control of manufacturers over the logistics, it brings a risk of theft and misplacing of a product. The producers may have to bear great losses and hence have their products insured. This also creates a question of the goodwill of a company. Many frauds take place relating to hampering the product before delivery.
Major players in the market provide temperature-controlled storage and custom distribution programs to logistics technology and direct-to-consumer fulfilment, a high level of flexibility in providing customized solutions and a greater level of agility in execution while maintaining cost efficiencies.
| Attributes | Details |
|---|---|
| Third party logistics services market (CAGR) | 8.6% |
| Third party logistics services market (2022) | USD 1039.08 Billion |
| Third party logistics services market (2032) | USD 1128.44 Billion |
Globalization, free trade and opening up of the markets for foreign multinational companies is a recent trade which is influencing the major trend of elongating supply chains and industrialization.
Rising cross border trade is the result of increasing collaboration between logistics service providers, government bodies and leverage of technology. Growing worldwide demand for logistics services has led the third party logistics (3PL) market to grow rapidly in the last decade.
But, as the time went, increase in third party logistics (3PL) players is resulted into fierce competition between 3PL market players. Today, third party logistics (3PL) players have few customers and at the same time they are dealing with the risk of increased prices. Emerging economies like South Africa, India, Nigeria, China, Brazil and Argentina are the sweet spots for the investments in third party logistics services.
The investments have grown more than two fold in these emerging markets. Third party logistics (3PL) service providers are increasingly adopting advanced technologies based on Internet of Things (IoT), cloud storage, data analytics, forecasting, real time product tracking etc. Massive public and private infrastructure developments related to transportation, agriculture, and defence sectors are bringing the traction in third party logistics (3PL) services market.
Recent trend in third party logistics (3PL) services market shows, the complete outsourcing of supply chain activities to third party logistics (3PL) players, increased transparency and customer-client engagement etc.
This has led to the third party logistics (3PL) players handling complete activities of packaging, raw material procurement, transportation, inventory management, warehousing, distribution etc. Rising e-Commerce distribution has also influenced the growth of 3PL services market.
Third party logistics (3PL) helps manufacturers to focus on their core business by providing complete or partial supply chain services like packaging, warehousing, procurement and distribution. There are two kinds of third party logistics (3PL) service providers. One who owns the assets like warehouses, trucks etc. and other just uses the rented assets.
Then there are 4PLs, who are consultants and complete supply chain intelligence providers and there are 5PLs, who help in efficient resource utilization. 5PLs aggregate the demand of many third party logistics (3PL) service providers and then they hire the cargo planes, ships, warehouses and other transportation services etc. Growing demand for cold chain services from pharmaceuticals and food & beverages sectors is driving the third party logistics (3PL) services market.
Growing regulatory environment and government policies related to distribution of pharmaceuticals and food & beverages is driving the global third party logistics (3PL) services market. Growing industrialization and trend of countries striving to become self-reliant and free from imports is pushing the demand for third party logistics (3PL) services market.
Procurement of raw materials like polymers, pulp & paper, metals and distribution of finished products like automobiles, packaging products, FMCG goods etc. at right times is a challenging task for third party logistics (3PL) service providers. Lack of labour force is restraining the growth of third party logistics (3PL) services market.
Third party logistics service market has been segmented on the basis of region into North America, Latin America, Eastern Europe, Western Europe, Asia Pacific Excluding Japan (APEJ), Middle East & Africa (MEA), and Japan. Asia Pacific Excluding Japan (APEJ) is expected to dominate the overall global third party logistics service market, followed by Western Europe. This is due to massive infrastructure development projects happening in China, India and other countries in APEJ region.
Some of the players associated with the global third party logistics service market are Yusen Logistics Co., Ltd., DHL Supply Chain & Global Forwarding, Sinotrans Limited, CEVA Logistics, Nippon Express Co., Ltd., DB Schenker Logistics, Kuehne + Nagel International AG, Ryder, Menlo Logistics, C.H. Robinson, Exel (tie) Schneider Logistics, Penske, APL Logistics, Danzas AEI (tie) Hub Group, TNT Logistics (tie) USCO Logistics, EGL Eagle Global Logistics and others.
The research report presents a comprehensive assessment of the market and contains thoughtful insights, facts, historical data, and statistically supported and industry-validated market data. It also contains projections using a suitable set of assumptions and methodologies. The research report provides analysis and information according to market segments such as geographies, application, and industry.
The report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, 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 segments. The report also maps the qualitative impact of various market factors on market segments and geographies.
The third party logistics service market is segmented on the basis of service type, asset ownership, contract and end-use industry.
The market is likely to register a CAGR of 8.6% through 2032.
The market is currently valued at US$ 1039.08 Bn in 2022.
The market is likely to grow to a valuation of US$ 1128.44 Bn by 2032.
Asia Pacific is likely to be a leading market during the forecast period.
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Third Party Logistics Services Market
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