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The Global Third-Party Logistics (3PL) Market size is projected to reach a value of USD 532.65 billion with a CAGR of 7.87% between 2022 and 2027. The growth of the third party logistics market depends on several factors, including the growth of e-commerce and the need for integrated shipping services, the increasing number of trade agreements among nations, and cost reduction through the use of third-party logistics.
This third-party logistics market research report extensively covers market segmentation by application (transportation services, warehousing and distribution services, and other services), end-user (manufacturing, retail, consumer goods, healthcare, and others), and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
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Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growth of e-commerce and the need for integrated shipping services are notably driving the third party logistics market growth. The emergence of the e-commerce sector is attributable to the rise in domestic consumption of products among the rapidly expanding middle-class population and the increasing adoption of the Internet and mobile services. As the global parcel volumes continue to grow at an exponential rate, the e-commerce vendors have found a reliable logistics partner in 3PL providers for more streamlined and cost-effective supply chain management. Therefore, the growth in the e-commerce industry has emerged as one of the major factors reshaping the global 3PL market.
An efficient supply chain provides an exceptional level of service across all channels. Due to a limited supply and the increase in demand, adopting the right distribution channel to reach out to consumers is also an increasingly difficult task. Therefore, several retailers opt to partner with 3PL service providers that provide integrated shipping services. As the e-commerce market continues to expand, the demand for 3PL services is also estimated to grow during the forecast period.
An increase in overseas shopping is the key trend in the third party logistics market. Online shopping offers access to a wide range of products and services and enables consumers to browse for particular items of interest effortlessly. The ability to compare prices, products, and delivery terms is a clear benefit of shopping online.
The major drivers for the increase in cross-border shopping include free shipping, safe payment methods, and the non-availability of items or products locally. The trend of overseas shopping is increasing in developing economies such as India and China, owing to the increasing Internet penetration and consumers having uninterrupted access to several communication devices and payment modes. To adapt to this changing consumer demand, logistics service providers need to be efficient in the supply chain process. The rapidly increasing overseas shopping scenario will boost the growth of the global 3pl market during the forecast period.
High operational cost and competitive pricing is the major challenge impeding the third party logistics market growth. The logistics industry is becoming highly competitive in terms of the pricing of services due to the increase in demand for value-added services (VAS) and specialized professional supply chain solutions in the logistics market. Rising fuel prices are also contributing to the cost of operations. Vendors in the market are under sustained pressure from customers to keep the prices low.
Moreover, the companies seeking 3PL services are demanding additional services at the same price; thus, 3PL companies are facing cost pressures associated with the pricing of their services. The industry is characterized by its capital-intensive nature. The market requires a capital-intensive infrastructure in terms of a large fleet of vehicles and containers at ports, skilled manpower, and technology-equipped warehouses specialized in storing different kinds of products. The contract logistics service providers must ensure that the operational cost is controlled to compete in the market. Therefore, high operational costs are posing a major challenge to the 3PL service providers in terms of maintaining their profit margins during the forecast period.
The third party logistics market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Third-party Logistics Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the third party logistics market.
BDP International Inc. - The company offers third party logistics solutions such as transportation, export facilitation, warehousing and distribution. The company also offers various services such as 4PL, transportation services, visibility tools, export facilitation, import facilitation, domestic facilitation, project logistics, and other services.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth of the transportation services segment will be significant during the forecast period. The transportation services segment in the global 3PL market encompasses various transportation modes for shipping goods, such as road, rail, air, and sea. The transportation services segment in the 3PL market is evolving in tandem with technological innovations. The segment is adopting various aspects of advanced vehicle-related IT systems, cloud-based data analytics, automated fleet management, location detection, and autonomous vehicle technologies to induce increased flexibility into their logistics operations and deliver profitable services as per the customers' requirements.
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The transportation services segment was valued at USD 358.42 billion in 2017 and continued to grow until 2021. Various vendors are focusing on expanding their vehicle fleets to strengthen their transportation capabilities and increase their market shares. Investments by vendors in the market are anticipated to drive the growth of the transportation services segment of the global 3PL market during the forecast period.
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APAC is estimated to contribute 47% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. A significant growth driver for the 3PL market in APAC is the increasing frequency of imports and exports of raw materials and finished goods worldwide. Although the import and export traffic for China has slowed down in the past few years, the domestic economy of the country continues to grow, which offers tremendous market potential for 3PL service providers in the region. Also, the thriving automobile manufacturing industry in Japan and India offers significant new revenue opportunities to the 3PL service providers.
The outbreak of the COVID-19 pandemic compelled the governments of several countries in APAC to implement stringent nationwide lockdowns that lasted for several weeks or even a few months during the first half of 2020. Due to these lockdowns, most commercial activities, including transportation, were halted, which, in turn, hampered the demand for 3PL services. However, in 2021, governments in the region started focusing on reviving their economies. For this, they announced various projects to increase capital investments across different sectors. Such initiatives will increase the demand for 3PL services across various industries during the forecast period.
The third-party logistics market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Third-party Logistics Market Scope |
|
Report Coverage |
Details |
Page number |
178 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.87% |
Market growth 2023-2027 |
USD 532.65 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
7.37 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 47% |
Key countries |
US, China, Japan, India, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
AP Moller Maersk AS, Baltic Logistics Group, BDP International Inc., Burris Logistics Co., C H Robinson Worldwide Inc., CMA CGM SA, DB Schenker, Deutsche Bahn AG, Deutsche Post AG, DSV AS, FedEx Corp., GEODIS SA, Hub Group Inc., J.B. Hunt Transport Services Inc., Kintetsu Group Holdings Co. Ltd., Kuehne Nagel Management AG, Nippon Express Holdings Inc., Sinotrans Ltd., United Parcel Service Inc., and XPO Logistics Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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