Third-party Logistics Market Size to grow by USD 532.65 billion between 2023-2027
According to a research report “ Third-party Logistics Market” by Application (Transportation services, Warehousing and distribution services, Other services) End-user (Manufacturing, Retail, Consumer goods, Healthcare, Others) Geography (APAC, North America, Europe, South America, Middle East and Africa)- Global Forecast to 2027 published by Technavio, the market size is estimated to grow by USD 532.65 billion, at a CAGR of 7.87% during the forecast period. The e-commerce industry's expansion is driven by the increasing domestic consumption of goods among growing middle-class populations and the widespread adoption of the Internet and mobile services. Consequently, e-commerce vendors require efficient and cost-effective logistics solutions to manage their supply chains. Third-party logistics (3PL) providers have become indispensable partners in addressing this need, offering specialized services such as inventory management, quick delivery, and freight forwarding. The e-commerce sector's growth has significantly impacted the global 3PL market, necessitating increased focus on operational efficiency and agility..
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By Application, the Transportation services segment is projected to dominate the market size in 2024
The third-party logistics (3PL) market's transportation services segment plays a pivotal role in the supply chain, facilitating the movement of goods via various modes, including road, rail, air, and sea. Outsourcing cargo and freight transportation processes to 3PL providers is a strategic decision for businesses, as it eliminates the need for substantial investment and expertise, thereby reducing overhead costs. Contract 3PLs provide efficient and timely transportation solutions, granting companies a competitive edge in the marketplace. Additionally, value-added services such as freight forwarding, project logistics, network planning, cargo insurance, optimization, and customs brokerage are offered by transportation services segment players. Technological innovations continue to shape the evolution of the transportation services segment in the 3PL market.
By End-user, Manufacturing segment is expected to hold the largest market size for the year 2024
In the dynamic business landscape of the third-party logistics (3PL) market, the manufacturing sector emerged as the largest revenue generator in 2022. The intricate relationship between manufacturing and logistics is well-established, with the former relying heavily on efficient supply chain management. The manufacturing industry's complexities include sourcing raw materials and components from numerous local suppliers, leading to intricate logistics processes. Outsourcing logistics activities to third-party providers offers significant benefits, such as reduced transportation costs, enhanced supply chain transparency, streamlined inventory and supplier management, business process optimization, and improved customer services. Consequently, the manufacturing sector's growing trend towards outsourcing logistics operations is poised to fuel market expansion throughout the forecast period.
APAC is forecasted to hold the largest market size by region in 2024
The third-party logistics (3PL) market in Asia Pacific (APAC) is experiencing robust growth due to the escalating imports and exports of raw materials and finished goods globally. Although China's import and export traffic has decelerated, its domestic economy continues to expand, creating substantial business opportunities for 3PL providers in the region. Moreover, the burgeoning automobile manufacturing industries in Japan and India present lucrative new revenue streams for 3PL service providers. However, the logistics sector in India remains largely unorganized, with challenges such as overpriced logistics, which negatively impacts both domestic and international competitiveness.
The Third-party Logistics Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market growth and forecasting and information about 20 market companies, including:
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Research Analysis Overview
The Third-party Logistics (3PL) market is witnessing significant growth due to the increasing demand for delivery partners who can handle international deliveries and provide benchmarking capabilities for businesses. Prominent vendors in this market include DHL, UPS, FedEx, and DB Schenker, among others. The e-commerce sector, particularly, is driving the growth of the 3PL market, as companies seek to outsource their supply chain activities to focus on their core business. The business model of 3PLs is evolving, with a shift towards digital transformation and omni-channel operations. New technologies, such as automation, robotics, and AI, are being adopted to enhance responsiveness and adaptability. The 3PL market caters to various industries, including toy retailers, medical equipment manufacturers, consumer goods companies, food and beverage industries, and shipping services. The market is witnessing a global shift towards 3PLs for their expertise in logistics infrastructure and operations. The 3PLs are providing end-to-end solutions, from warehousing to shipping services, to ensure efficient and timely delivery of goods. The market is expected to continue growing, driven by the increasing demand for efficient and cost-effective logistics solutions in the e-commerce sector. A fund, which invests in logistics and supply chain companies, recently reported that the 3PL market is expected to reach USD2 trillion by 2025, growing at a CAGR of 7% during the forecast period. The market is expected to be driven by the growing demand for e-commerce services, increasing globalization, and the adoption of new technologies.
Market Research Overview
The Third-party Logistics (3PL) market is witnessing significant growth in various industries, including healthcare, retailing, and consumer electronics, driven by the rising demand for efficient and cost-effective logistics solutions. Elements such as international transportation management, domestic transportation management, and warehousing & distribution are key elements of the 3PL market. Technological advancements, including IT solutions & software, are transforming the logistics sector. However, higher logistics costs and poor infrastructure continue to pose challenges. Trading activities, acquisitions, and mergers are common strategies used by players to reduce costs and improve responsiveness and adaptability. The 3PL market caters to various sectors, including healthcare, retail, and e-commerce. Cross-border trade activities, last-mile connectivity, and return logistics are becoming increasingly important. Freight forwarders, cargo agents, ship-owners, and freight-management companies offer various logistics services, from airways and waterways to roadways and railways. Prominent vendors in the 3PL market include e-commerce services, toy retailers, and shipping services. The business model of 3PL providers relies on benchmarking, advanced technology, sustainability, and a focus on customer delivery time and responsiveness. The e-commerce market and food & groceries industry are major contributors to the 3PL market's growth. The global shift towards digital transformation and omni-channel operations is driving the adoption of new technologies in the 3PL market. High-tech services, such as logistics software and freight-management solutions, are becoming essential for efficient supply chain activities. The food and beverage industry, medical equipment, consumer goods, and operations in emerging economies are also significant contributors to the 3PL market's growth. In conclusion, the 3PL market is a dynamic and evolving industry that plays a crucial role in the global supply chain. The ability to provide cost-effective, efficient, and responsive logistics solutions is essential for businesses to remain competitive in today's market. With the increasing adoption of technology and the growing importance of cross-border trade activities, the future of the 3PL market looks promising.
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