Fourth Party Logistics (4PL) Market by End-user, Type and Geography Forecast and Analysis 2023-2027

Fourth Party Logistics Market Forecast 2023-2027

The fourth party logistics market size is estimated to increase by USD 17.94 billion and grow at a CAGR of 5.56% between 2022 and 2027. Market growth hinges on several factors, including the benefits of 4PL, rising levels of inorganic activities, and the rapid expansion of the e-commerce sector. However, challenges such as warehouse shortages, elevated operational expenses, and fierce competition on pricing persist, alongside the widespread adoption of 3PL solutions. Historically, businesses maintained tight control over their processes by managing operations in-house. However, with the rise of complexities and intense competition, management's priorities are evolving towards bolstering core business functions. This change in fo

What will be the Size of the Fourth Party Logistics Market During the Forecast Period?

To learn more about this report, View Report Sample

Segmentation

This report extensively covers market segmentation by end-user (manufacturing, retail, consumer goods, healthcare, and food and beverages and others), type (solution integrator mode, synergy plus operating mode, and industry innovator mode), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By End-user

The manufacturing segment will account for a major share of the market's growth during the forecast period. Manufacturing includes a range of activities and production techniques ranging from traditional production techniques in small and medium enterprises to the manufacture of complex products in large enterprises. The companies in this industry are characterized as factories, factories, factories. With innovations in technologies and significant support from the government, the industry is rising. To carry out planning, coordination, and service-related functions logistics in manufacturing is essential.

Get a glance at the market contribution of various segments Request Free PDF Sample

The manufacturing segment was valued at USD 10.41 billion in 2017 and continued to grow until 2021. The logistics industry is becoming highly competitive around the globe, and this factor is driving logistics companies to outsource services such as 4PL for industries such as manufacturing. Market players operating in the global market know the unique logistics challenges faced by manufacturing companies. Thus, they provide flexibility and efficiency by streamlining the supply chain in several ways, such as in-plant logistics, to replenish the line side on a pull basis to increase efficiency, assembly, and configuration. Such innovative solutions are expected to drive the global market during the forecast period.

Type Segment Analysis:

Based on mode of type, the market has been segmented into solution integrator mode, synergy plus operating mode, and industry innovator mode. The solution integrator mode segment will account for the largest share of this segment.? In this variant of the model, the 4PL acts as the integrator of various third-party logistics (3PL), and on behalf of its client, this acts as a single window for freight negotiations, 3PL selection, and freight management. Under this model, 4PL operates gives complete supply chain solutions for a single client. The solution includes the resources, capabilities, and technologies of the 4PL with complementary service providers.

Moreover, some vendors are expanding their fleets of vehicles to improve their transportation capabilities and raise their market shares. For example, in December 2022, Deutsche Post (DHL) invested about USD 78.28 million in adding six fully electric 16-tonnes Volvo trucks to its fleet in the UK. Such investments by vendors are expected to drive growth in the 4PL logistics market during the forecast period.

By Regions

APAC is estimated to contribute 40% to the growth of the global market during the forecast period.

For more insights on the market share of various regions Request Free PDF Sample now!

Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. The rising frequency of imports and exports of raw materials and finished goods worldwide are the key drivers to the significant growth of the market. For example, however, the import and export traffic in China has slowed down in the past few years, and the domestic economy of the country continues to rise, which offers huge demand potential for the market. Also, the growing automobile manufacturing industry in Japan and India offers new revenue opportunities to 4PL service providers.

Moreover, the logistics sector in India is mainly unorganized and faces multiple challenges, such as overpriced logistics, which is impacting the competitiveness in domestic as well as global markets. Challenges such as fragmented warehousing, underdeveloped material handling infrastructure, and lack of seamless movement of goods are mainly faced by the industry. 4PL service providers are experts in the logistics industry and offer more efficient ways of transporting goods. Ways that can be used to advance the industry include focusing on new technologies, upskilling employees through training and development programs, removing bottlenecks, rising automation, implementing a single point of contact system for giving clearances, improving inter-modal transportation, and simplifying the overall supply chain processes.

Market Dynamics and Customer Landscape

The market is experiencing a surge in demand and innovation, driven by several key factors and emerging trends across various industries. With the global supply chain becoming increasingly complex and interconnected, businesses are turning to 4PL service providers to streamline their operations and overcome bottlenecks. Industries such as food & beverage, healthcare, consumer electronics, e-commerce, and the oil & gas sector are among those leveraging 4PL services to enhance efficiency and agility in their supply chain processes.

One of the significant drivers propelling the growth of the 4PL market is the rapid digitization of logistics operations. As companies strive to optimize their inbound logistic services and overall supply chain management, they are embracing cloud-based technology and advanced digital solutions offered by 4PL providers. This digitization not only improves visibility and transparency but also enables real-time tracking and data analytics, empowering businesses to make informed decisions and respond swiftly to market dynamics.

Moreover, the shift towards business-to-business (B2B) operating models is another prominent trend shaping the 4PL market landscape. As businesses seek strategic partners to manage their logistics operations comprehensively, 4PL providers are stepping in to offer end-to-end solutions tailored to specific industry needs. This trend is particularly beneficial for small and medium-sized companies looking to optimize their supply chain without investing heavily in infrastructure and resources. Furthermore, with the consumer electronics industry witnessing a surge in R&D activities and the demand for technologically advanced products such as smart accessories, energy-efficient devices, wearable tech, and smart home gadgets, the need for tech-driven logistics services provided by 4PL partners becomes increasingly apparent. As per capita income rises globally, consumers are increasingly inclined towards these innovative products, further fueling the demand for efficient supply chain solutions. In essence, the Fourth Party Logistics market is poised for continued growth, driven by the convergence of digitalization, industry-specific requirements, and the ever-evolving landscape of global trade and commerce.

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.

Key Market Driver

The market is experiencing significant growth, largely propelled by the inherent advantages it offers to businesses navigating the complexities of the global supply chain landscape. Traditionally, operations were managed in-house by businesses aiming to maintain tight control over their processes. However, as businesses face increasing complexities and fierce competition, the management's focus is shifting towards enhancing core business functions. This paradigm shift has led to a rising preference for outsourcing to specialized 4PL service providers.

One of the primary drivers of the 4PL market is the efficiency and expertise that providers bring to the table. By entrusting operations to external partners, businesses can streamline their supply chain networks and enhance overall performance. This leads to reduced lead times between order placement and delivery, as well as a more balanced inventory management system. Additionally, outsourcing enables companies to benefit from advanced information management systems, providing clear visibility into costs and transportation statuses. As a result, businesses can make more informed decisions, optimize resource allocation, and ultimately improve their bottom line. With these advantages driving adoption, the market is poised for robust growth in the forecast period, as more companies recognize the value of outsourcing to specialized partners.

Significant Market Trends

The increasing adoption of blockchain in logistics is the primary trend driving the growth of the global market.  A blockchain is a distributed database that stores records called blocks. A blockchain database can securely and persistently record transactions between parties. Blockchain-based digital ledgers enable faster transactions with lower fees and help prevent fraud. Blockchain works as a distributed ledger that stores and processes transactions across a computer network. In market blockchain improves transparency and accountability by sharing data with multiple parties. 

Moreover, due to the increasing number of stakeholders and the involvement of many third parties supply chain networks are becoming more complex. Blockchain is a perfect solution to address such challenges. Owing to the rising complexity in the supply chain of the logistics industry, market players operating in the 4PL logistics market have been growing their focus on blockchain to raise operational efficiency and gain other advantages. Hence, the adoption of blockchain by 4PL market players will drive the growth of the market in focus during the forecast period.

Major Market Challenge

Warehouse shortage is the major challenge to the growth of the global market. Demand for these systems is increasing, especially in developing countries such as China. Although, some newly constructed warehouses have poor building standards and do not comply with the needs of many businesses. Additionally, a lack of land area for the construction of new facilities and a lack of premium facilities in Tier-I cities has led the providers to shift the logistics to non-premium locations.

Furthermore, some business owners are considering converting retail space to warehouses to ensure they can keep up with storage and logistics demands. An online retailer and 4PL providers are competing for logistics space in urban areas where industrial space is being used for residential use. Competition from residential sites is rising the price of land in these areas. Thus, a shortage of warehouses may impede the growth of the global fourth party logistics market during the forecast 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 Fourth Party Logistics 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.

• 4PL Group: The company offers fourth party logistics such as road freight, air freight, rail freight, ocean freight and cross border services.
• Allyn International Services Inc.: The company offers fourth party logistics such as end to end shipment management, logistics expertise and consultancy support.

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

• 4PL Group
• Allyn International Services Inc.
• AP Moller Maersk AS
• C H Robinson Worldwide Inc.
• CMA CGM SA Group
• Conexial Supply Chain India PVT LTD
• DB Schenker
• Deutsche Post AG
• DSV AS
• Express Delivery Sweden AB
• FedEx Corp.
• Global4PL
• J and J Denholm Ltd.
• Kuehne Nagel Management AG
• Logistics Plus Inc.
•  LOGISFASHION SA
• OIA Global
• Overseas Corporation Pvt Ltd
• SNCF Group
• 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.

Segment Overview

The market 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. 

• End-user Outlook
  • Manufacturing
  • Retail
  • Consumer goods
  • Healthcare
  • Food and beverages and others
• Type Outlook 
  • Solution integrator mode
  • Synergy plus operating mode
  • Industry innovator mode
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile 
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is witnessing exponential growth, especially within industries like food & beverage and consumer electronics, driven by the digitization revolution. Leveraging cloud-based technology, 4PL providers streamline inbound logistic services, offering efficient solutions for diverse sectors such as oil & gas and aerospace & defense. They excel in supply chain design and implementation, embodying industry innovator and solution integrator models. Synergy plus operating models foster collaboration, benefiting small and medium-sized companies. With a focus on R&D activities, 4PL integrates smart accessories and energy-efficient products into logistics solutions, ensuring rapid and safe delivery. Through IoT-enabled connected devices, reverse logistics operations, and freight forwarding, they mitigate carbon emissions while ensuring timely delivery and improved customer experience. Embracing challenges associated with integration, 4PL pioneers tech-driven logistics services, revolutionizing warehousing, distribution, and transportation for a sustainable future.

Also, the market is witnessing a dynamic transformation, especially in sectors like oil & gas, food & beverages, and consumer electronics. As an industry innovator, 4PL providers leverage advanced IT solutions to optimize business-to-business (B2B) operating models. They act as strategic partners for companies, offering efficient supplier tracking systems and lead logistics provider (LLP) services. With a global shift towards dynamic logistics, 4PLs ensure timely and cost-effective planning, execution, and delivery, overcoming challenges of system integration. Their expertise in warehouse and supply chain management ensures rapid and safe distribution, especially for perishable goods, through modes like Sea Freight, offering cost-effective and reliable transportation solutions amidst rapid technological growth.

Moreover, the market is experiencing rapid growth, driven by the global shift toward dynamic logistics. As an industry innovator model, 4PL solutions revolutionize supply chain management in sectors like oil & gas and consumer electronics. Logistics operators leverage technologically advanced devices for efficient and cost-effective solutions, addressing challenges associated with integrating multiple systems. From wearable devices to smart home technologies, 4PL ensures timely and cost-effective planning, execution, production, and delivery. With expertise in warehouse and supply chain management, 4PL providers offer logistics solutions for perishable goods, ensuring rapid and safe delivery, ultimately optimizing per capita income worldwide.

Fourth Party Logistics Market Scope
Report Coverage	Details
Page number	167
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 5.56%
Market growth 2023-2027	USD 17.94 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	5.09
Regional analysis	APAC, Europe, North America, Middle East and Africa, and South America
Performing market contribution	APAC at 40%
Key countries	US, China, Japan, Germany, and France
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	4PL Group, Allyn International Services Inc., AP Moller Maersk AS, C H Robinson Worldwide Inc., CMA CGM SA Group, Conexial Supply Chain India PVT LTD, DB Schenker, Deutsche Post AG, DSV AS, Express Delivery Sweden AB, FedEx Corp., Global4PL, J and J Denholm Ltd., Kuehne Nagel Management AG, Logistics Plus Inc.,  LOGISFASHION SA, OIA Global, Overseas Corporation Pvt Ltd, SNCF Group, and XPO Inc.
Market dynamics	Parent market analysis, Market forecasting, 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.

View PDF Sample

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 market analysis and report on the factors that will challenge the market research and growth of market companies

We can help! Our analysts can customize this market research report to meet your requirements. 

Get in touch