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The 4PL market in Europe is estimated to grow at a CAGR of 5.25% between 2022 and 2027 and the size of the market is forecast to increase by USD 5,406.56 million. The growth of the market depends on several factors, including the advantages of 4PL, increasing numbers of mergers and acquisition activities, and rapid growth in the e-commerce industry.
This report extensively covers market segmentation by end-user (manufacturing, retail, consumer goods, healthcare, and others) and type (solution integrator mode, synergy plus operating mode, and industry innovator mode). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The 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 4PL Market in Europe Customer Landscape
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 various advantages offered by the 4PL are the key factor driving the Europe Fourth Party Logistics Market growth. Traditionally, logistics functions have been handled in-house. This is because companies prefer to exercise control and minimize risk. However, as complexity within companies increases and competition intensifies, companies' focus shifts to their core competencies. Management departments of various companies focus all their resources on improving their core business. This encourages companies to shift their focus to the 4PL. The reason is that logistics can consume a lot of time and resources. Outsourcing logistics by companies also has the advantage of leveraging the expertise of logistics providers. This has optimized the business network and improved the performance of the supply chain. It contributes to shortening the lead time from order receipt to delivery and reducing inventory. In addition, information management becomes easier, and the cost and transportation status can be seen at a glance. Therefore, companies that focus on their core business will lead to increased outsourcing, contributing significantly to the revenue of the 4PL market in Europe during the forecast period.
Mergers & Acquisitions play an important role in the development of the 4PL market in Europe. In most cases, 4PL providers use Mergers and Acquisitions to expand their service offerings, expand their geographic reach, preserve assets and technology, secure management talent, increase market share, and more. For example, in July 2022, CMA CGM completed its acquisition of GEFCO, the European leader in automotive logistics. The acquisition will enable CEVA Logistics, a subsidiary of the CMA CGM Group, to strengthen its logistics services, especially in France and the rest of Europe.
The increase in retail sales will fuel the growth of the Europe 4PL Market. Growing retail sales in Europe will influence the demand for logistics services during the forecast period. After all, logistics play a vital role, from manufacturing products to delivering goods to retailers. Logistics improves supply chain efficiency by reducing costs and shortening lead times. Balancing inventory levels, retail sales, and logistics services has become increasingly complex. Therefore, they need the services of a provider with 4PL expertise. By outsourcing functions such as transportation, warehousing, customs clearance, packaging, customer service, and managing IT systems, companies can focus on their core competencies. Several companies are expanding their geographic footprints, product portfolios, and manufacturing capabilities. Therefore, there are multiple logistics requirements, such as sourcing raw materials, transporting and storing finished goods, and tracking shipments, which are complex functions. This increases the need to expand retail technology and supply chain capabilities. Therefore, expanding supply chain capacity will increase the demand for 4PL, driving the growth of the featured market during the forecast period.
Increased focus on digitization is one of the key trends in the logistics market. Digitization is becoming a trend as the Internet leads to cost savings through synchronization between trading partners and service providers. It has numerous advantages, such as improving logistics operations and technology strategies, enabling optimization and collaboration, and leveraging centralized logistics intelligence that provides visibility across the supply chain. Digital logistics integrates new enterprise and supply chain logistics applications with core warehousing, transportation, and work management systems, enabling new process models.
The high operational costs and competitive pricing among vendors can majorly impede the growth of the Europe Fourth Party Logistics (4PL) Market. With the increasing demand for 4PL services such as transportation, warehousing, and distribution, companies are also looking for value-added services and professional supply chain solutions. The availability of value-added service offerings has increased price-based competition among 4PL service providers in Europe. Market fragmentation also leads to price competition among providers. Businesses are often under price pressure as customers demand additional services at the expense of basic services. A characteristic of the market is its capital-intensive nature. The market requires capital-intensive infrastructure in the form of large numbers of vehicles and containers at port stops, warehouses with specialized technology to store different types of products, and a skilled workforce. 4PL service providers need to control operating costs to compete in the market. Therefore, such factors are expected to hamper the growth of the featured market during the forecast period.
Along with this, the adoption of 3PL also poses challenges to the market. The 3PL model outsources processes such as warehousing, shipping, packaging, and distribution to a 3PL provider, while the manufacturer retains control of the supply chain. 3PL is suitable for small businesses. Manufacturers around the world are expanding their manufacturing capabilities and operations, increasing logistical requirements in terms of moving raw materials to factories and finished goods to retailers and distributors. Therefore, the introduction of 3PL in logistics operations prevents the use of 4PL. This will adversely affect the growth of the focused market during the forecast period.
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 market.
Accenture Plc: The company offers different 4PL services such as the GT Nexus supply chain collaboration platform. Along with this it also sells and delivers its services and capabilities to clients across Europe.
Allyn International Services Inc: The company offers trade, logistics, tax compliance services, and different 4PL services such as freight management and invoice audit.
We also have detailed analyses of the market’s competitive landscape and offer information on 15 market vendors, including:
The report offers clients a deeper understanding of the market and its players through a combined qualitative and quantitative analysis of the vendors. The analysis classifies vendors into categories based on their business approach, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak to understand the dos and don’ts of business which in turn can help a client make the best decision.
The manufacturing segment will contribute a major share of the Europe Fourth Party Logistics (4PL) Market, as it encompasses a wide range of activities and production techniques, from small and medium-sized enterprises employing traditional production techniques to large enterprises producing complex products. The manufacturing segment showed a gradual increase in market share with USD 3,345.46 million in 2017 and continued to grow until 2021. European manufacturing accounts for over 14% of the GDP. The industry is growing due to technological innovation and government support.
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The European logistics industry has become highly competitive and this competitiveness has led logistics companies to outsource services like 4PL to industries such as manufacturing. Vendors operating in the 4PL market understand the unique logistical challenges faced by manufacturers. It, therefore, offers flexibility and efficiency by streamlining the supply chain in a number of ways. It provides consumers with value-added services, effective procurement, and procurement to manage procurement and order management, reducing component and administrative costs. These innovative solutions are driving the growth of manufacturing in the market. In Europe, Western Europe is considered the center of production. However, rising wages and rents in Western Europe have shifted the focus of the industry to Central and Eastern Europe. The Czech Republic, Poland, Romania, and Hungary will become essential hubs for manufacturing innovation during the forecast period due to the ready access to cash subsidies and tax incentives. The availability of low-wage and qualified workers is also shifting corporate attention from Western Europe to Eastern Europe. Therefore, the above factors are expected to drive the growth of the market through the manufacturing segment during the forecast period.
The type segment includes the synergy plus model. In the Synergy Plus model, a 4PL provider works with a single 3PL provider in a partnership-like manner to develop supply chain solutions that better serve industry customers. The Synergy Plus operating model includes 4PL and 3PL partnerships to commercialize supply chain solutions combining the capabilities and market reach of both partners. A 4PL provides expertise in technology, supply chain strategy skills, go-to-market capabilities, and program management. This 4PL business environment enables companies to optimize forecasting, order fulfillment, production, and distribution with their suppliers and service providers in terms of integrated supply chain management. By focusing on the entire supply chain, 4PL can significantly improve customer service. Therefore, the above advantages of 4PL facilitate synergies, and the deployment of operating models will boost the growth of the segment and propel the market growth during the forecast period.
The report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
4PL Market Scope in Europe |
|
Report Coverage |
Details |
Page number |
171 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.25% |
Market growth 2023-2027 |
USD 5,406.56 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.88 |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
4PL Consultancy Ltd., Accenture Plc, Allyn International Services Inc., AP Moller Maersk AS, C H Robinson Worldwide Inc., Central Station AG, CMA CGM SA, Deutsche Post AG, DFDS AS, DSV AS, GEODIS SA, Kinaxia Logistics Ltd., Kuehne Nagel Management AG, Logistics Plus Inc., ROHLIG SUUS Logistics S.A., Stef, United Parcel Service Inc., Wiima Logistics, XPO Inc., and Deutsche Bahn AG |
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, Market condition analysis for 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. |
We can help! Our analysts can customize this report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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