Fifth-Party Logistics (5Pl) Solutions Market Analysis APAC, North America, Europe, Middle East and Africa, South America - US, China, Germany, France, Japan - Size and Forecast 2024-2028

5PL Solutions Market Size 2024-2028

The Fifth-party Logistics (5PL) Solutions Market size is estimated to grow by USD 406.3 million between 2023 and 2028, and the size of the market is forecast to increase at a CAGR of 6.95%. The growth of the market depends on several factors, such as the rise in global containerized cargo trade, the growing global e-commerce industry, and the rising free trade agreement in Europe The shift in global trade patterns toward containerized seaborne and air cargo-based trade has increased in recent years. To facilitate the smooth transportation of containerized goods, there is an increase in demand for 5PL logistics services. In addition, the rise in the number of free-trade agreements is the major factor driving the volume of containerized cargo trade. Furthermore, the report includes historic market data from 2018 to 2022.

What will be the Size of the 5PL Solutions Market During the Forecast Period?

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Market Dynamic

The market is evolving with the rise of e-commerce and advancements in logistics management. As internet penetration increases globally, 5PL providers like Agility Logistics and Shipa Freight are leveraging network technology and system integration for efficient supply chain management. These solutions enhance supply networks and enable omnichannel retailing, ensuring seamless inventory movement and visibility across shipment locations. Blockchain technology ensures secure transactions and data integrity in logistics operations. IoT plays a crucial role in monitoring and optimizing supply chain processes. Events such as model shifts in consumer behavior drive the need for agile logistics solutions, positioning 5PLs at the forefront of innovation in managing complex supply chain dynamics effectively. Our researchers analyzed the data with 2023 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.

Key Market Driver

The rise in global containerized cargo trade is one of the key factors driving the market growth. The shift in global trade patterns toward containerized seaborne and air cargo-based trade has increased in recent years. To facilitate the smooth transportation of containerized goods, there is an increase in demand for 5PL logistics services. In addition, the rise in the number of free-trade agreements is the major factor driving the volume of containerized cargo trade.

Moreover, the growing economic prosperity in Asian countries is also expected to increase the volume of containerized cargo. The containerized cargo trade involves a highly complex supply chain with a huge number of intermediaries. 5PL players can provide information technology-based supply chain solutions, such as coordinating with intermediaries for time-definite delivery. Therefore, the growth in global containerized cargo trade and the number of free-trade agreements is expected to increase the demand for 5PL logistics services during the forecast period.

Significant Market Trends

Collaborative partnerships and strategic alliances will fuel the global fifth-party logistics solutions market growth. Collaborative partnerships enable 5PL providers to offer integrated solutions that span the entire supply chain. By combining their capabilities with partners, 5PL providers can provide comprehensive services that include warehousing, inventory management, order fulfillment, customs clearance, and value-added services. Integrated solutions streamline supply chain processes, improve efficiency, and offer convenience to customers by eliminating the need for multiple service providers.

Moreover, collaborative partnerships allow for the sharing and optimization of resources among supply chain stakeholders. For example, a 5PL provider may partner with a company to access a broader network of carriers and vehicles, improving efficiency and coverage. Partnerships can also facilitate the sharing of warehousing facilities, technology platforms, and expertise, reducing costs and enhancing service quality. Such a factor is expected to drive the growth of the global market during the forecast period.

Major Market Challenge

Shortage of skilled drivers in the logistics industry is the major challenge to the global fifth-party logistics solutions market growth. Logistics services across the world are highly dependent on the trucking industry for transporting cargo or products to various distributors. However, there is a shortage of skilled truck drivers in the global logistics industry. A shortage of skilled truck drivers can result in supply chain disruption in the global market, where the lead time is of critical importance and determines the possibility of uninterrupted workflow at the end-user stage. Many truckers object to the US regulation on electronic logging devices in the transportation industry, as digital monitoring of drivers is considered an invasion of privacy.

Moreover, European countries have also been witnessing a shortage of skilled drivers. In 2022, according to Truck Mobility Info, Europe estimated around 10% shortage of skilled drivers in the freight transportation sector. The logistics industry in developing countries such as Vietnam is complex due to inefficient logistical infrastructure. Thus, there is a need for experienced truck drivers who can adapt to such challenges while ensuring the timely delivery of products. Such a factor is expected to pose a challenge to the growth of the global market during the market analysis and report period.

Market Customer Landscape

The market research 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 Market Customer Landscape

Who are the Major 5PL Solutions Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

5PL Logistics Solutions LLC: The company offers 5PL solutions through supply chain services and contract logistics services.

AP Moller Maersk AS: The company offers 5PL solutions through supply chain logistics called NeoNav.

The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• 5PL Logistics Solutions LLC
• AP Moller Maersk AS
• C H Robinson Worldwide Inc.
• CEVA Logistics AG
• DACHSER SE
• DB Schenker
• Deutsche Post AG
• DSV AS
• Expeditors International of Washington Inc.
• FedEx Corp.
• Hemisphere Freight Services Ltd.
• Hitachi Transport System Ltd.
• J B Hunt Transport Services Inc.
• Japan Post Holdings Co. Ltd.
• Kuehne Nagel Management AG
• Nippon Express Holdings Inc.
• Schultz Shipping Group
• United Parcel Service Inc.
• XPO Inc.

Qualitative and quantitative analysis of companies 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 companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Segmentation

By Service Segment 

The transportation segment will account for a major share of the market's growth during the market forecast period. The increasing demand for multimodal transportation methods, rising adoption of e-commerce, growing demand for customized logistics solutions, and increasing focus on sustainability are expected to drive the growth of the transportation segment of the global market during the forecast period.

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The transportation segment was valued at USD 390.40 million in 2018. The growth of the transportation segment is attributed to the increasing demand for multimodal transportation methods, which provide optimum route planning for minimizing transportation costs. The transportation segment is further segmented into air transportation, ocean transportation, and road transportation.

Air transportation is expected to be the fastest-growing mode of transportation in the market, owing to its high speed and reliability. Ocean transportation is expected to be the second-fastest-growing mode of transportation due to its low cost. Road transportation is expected to be the third-fastest-growing mode of transportation due to its flexibility and convenience. Such factors will increase segment growth during the forecast period.

By Application Segment 

Based on application, the market has been segmented into e-commerce, logistic companies, and traders. The e-commerce segment will account for the largest share of this segment. 5PL providers in this market offer a range of services tailored specifically for the e-commerce segment. They play a crucial role in e-commerce order fulfilment. They receive process, and manage orders from online platforms, warehouses, or distribution centers. They handle inventory management, pick and pack products, and coordinate the shipping and delivery of orders. 5PL companies assist e-commerce businesses in managing their inventory effectively. They employ advanced inventory management systems and technologies to track stock levels, monitor product availability, and ensure timely replenishment. This helps businesses optimize their inventory, reduce stockouts, and improve order fulfilment. Such factors will increase segment growth during the market forecasting period.

Key Region

APAC is estimated to contribute 42% to the growth of the global market during the forecast period.

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Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.  The increasing focus on supply chain optimization is also expected to drive the growth of the market in APAC during the forecast period. Companies are increasingly realizing the importance of having a well-optimized supply chain in order to improve efficiency and reduce costs. 5PL providers can help companies achieve this by providing a wide range of services, such as demand forecasting, inventory management, and transportation planning. Such factors are expected to drive the growth of the regional market during the market growth and trends period.

Segment Overview

The market report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.

• Service Outlook
  • Transportation
  • Warehousing
  • Other services

• Application Outlook
  • E-commerce
  • Logistic companies
  • Traders

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

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Market Analyst Overview

The market is pivotal in today's global logistics landscape, addressing the complexities of supply chain management with advanced technologies and strategic partnerships. As e-commerce continues to expand, companies like Shift Freight and Agility Logistics leverage network technology and system integration to optimize supply networks and enhance omnichannel retailing. Real-time data from IoT and AI-powered analytics platforms enable efficient inventory management and dynamic allocation across distribution locations. Automated storage and retrieval systems in cloud-based warehouses improve efficiency while blockchain ensures secure transactions and compliance in customs clearance and return logistics. With a focus on on-time delivery and customer satisfaction, 5PLs streamline operations, reduce inefficiencies, and adapt to interruptions, ensuring seamless logistics solutions for diverse cargo types and transportation modes worldwide.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the market research and growth of market vendors

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