Companies all around the world are increasingly choosing to outsource their logistical needs to concentrate on their core capabilities and cut expenses. A skilled logistics service company that can give end-to-end alternatives is also becoming more and more necessary as global supply chains get more complex. This is expected to drive the fifth-party logistics market's growth during the coming decades.
COVID-19 Impact and Market Status
The COVID-19 pandemic epidemic has had a big impact on the world economy, and enterprises in many industries are feeling the pinch. The closure of manufacturing facilities and limitations on the cross-border movement of goods has resulted in a decrease in demand for logistics services, and the logistics and transportation sector is no exception. In turn, it is anticipated that this will have a detrimental effect on the fifth-party logistics market's expansion in 2020. But, the market is anticipated to regain momentum and rise at a strong pace during the projected period as economic activity gradually picks up after the lockdown period.
The Transportation Type to Emerge as the Most Lucrative Segment
The market is divided into transportation, warehouse, and other services according to type. The industry segment for transportation is anticipated to develop at the greatest CAGR throughout the forecast period. This can be due to the expanding trend of outsourcing logistics operations as well as the rising demand for transportation services from logistics providers, traders, and e-commerce businesses.
The Most Popular Application Segment is E-commerce
The market is categorized depending on the application: traders, e-commerce, and logistic companies. During the projected period, the target market for e-commerce is anticipated to have the highest CAGR. This expansion can be linked to the rise of omnichannel retailing, multi-channel distribution, and the number of online customers.
The Asia Pacific (APAC) region to render Adequate Financing Avenues
Geographically speaking, the market is split into five categories: Asia Pacific, North America, Africa, South America, the Middle East, and Europe. Over the projected period, the fifth-party logistics market in the Asia Pacific is anticipated to grow at the highest CAGR. This expansion is attributable to the rise in demand for outsourced logistics services coming from nations like China and India. The market for fifth-party logistics in Asia Pacific is also booming as a result of the region's expanding online shopping trend.
As omnichannel retailing becomes a more popular trend, the market for fifth-party logistics is booming. To give customers a smooth purchasing experience, omnichannel retailing combines offline and internet channels. To ensure a positive customer experience, an efficient logistics system must be in place.
An emerging business model known as fifth-party logistics (5PL) describes the blending of logistics services from several third-party logistics (3PL) providers and other specialized service providers to produce a unique solution for a shipper. The main distinction between 5PLs and fourth-party logistics (4PL) providers is that the former does not own any physical assets, such as warehouse facilities or fleets of vehicles. To offer their clients a more effective and affordable service, they instead concentrate on managing and coordinating the operations of their supplier relationships.
Warehouse, transportation, and other services can all be categorized under the umbrella term of fifth-party logistics providers. The internal and external land, sea, and air transportation of commodities are included in the category of public transit. These services assist businesses in lowering total transportation expenses and enhancing supply chain effectiveness. Storage, packing, and product distribution are all included in warehouse services. These services assist businesses in reducing the cost of storing and optimizing their inventory levels.
The increasing implementation of blockchain technology has been identified as the main trend in the fifth-party logistics business. Businesses are using blockchain technology to streamline and improve the operations of their supply chains. The fifth-party logistics market is also expanding as a result of the emerging trend of omnichannel commerce.
At a CAGR of 5.2% over the projected timeframe, the fifth-party logistics market is anticipated to increase from USD 203.02 billion in 2019 to USD 302.48 billion in 2029. This market is expanding as a result of rising demand from merchants, e-commerce businesses, and logistics organizations for outsourced logistics services. The fifth-party logistics market is also expanding as a result of the emerging trend of omnichannel commerce.
The lack of visibility in costing and conditions of service agreements is the main issue businesses in the fifth-party logistics market must deal with. Another significant challenge for businesses in this industry is the high startup costs associated with starting up a 5PL organization. Nevertheless, possibilities for the expansion of the fifth-party logistics market are anticipated to arise from the rising trend of outsourcing logistics services throughout the course of the projected timeframe.
The major companies competing in the market for fifth-party logistics include XPO Logistics, Kuehne + Nagel, C.H. Robinson, GEODIS, and DHL Supply Chain. To enhance their market share in the worldwide fifth-party logistics industry, these enterprises are concentrating on growing their businesses through a variety of organic and inorganic growth tactics, including partnerships, collaborations, and the introduction of new products. This study offers a thorough competitiveness analysis of the global fifth-party logistics marketplace as a result.
Recent Developments of the Fifth-party Logistics Market
- 2019 saw the announcement that DHL Supply Chain, a division of Deutsche Post DHL Group, has acquired Mitchell International, a warehouse operator with a focus on e-commerce. With the help of this acquisition, DHL Supply Chain should be able to further solidify its position in the e-commerce logistics industry.
- 2019 - One of the top North American providers of transportation solutions, JBHunt Transport Services Inc., announced that it had acquired final mile delivery service company Cory 1st Choice Home Delivery. JBHunt Transport Services anticipates that this acquisition will aid in growing its presence in the market for residential deliveries.
- 2019 - XPO Logistics Inc., one of the largest suppliers of transportation solutions globally, said that it has acquired Con-way Inc., a top North American provider of less-than-truckload transportation services. This acquisition should aid XPO Logistics in increasing the size of its presence in the North American logistics sector.
Fifth-party Logistics Market Scope
|Forecast Unit||Value (USD)|
|Revenue forecast in 2028||USD 302.48 billion|
|Growth Rate||CAGR of 5.2 % during 2021-2028|
|Segment Covered||Type, Application, Regions|
|Regions Covered||North America, Europe, Asia Pacific, Middle East and Africa, South America|
|Key Players Profiled||XPO Logistics, Kuehne + Nagel, C.H. Robinson, GEODIS, and DHL Supply Chain.|
Key Segments of the Global Fifth-party Logistics Market
Type Overview, 2019-2029 (USD Billion)
- Other Services
Application Overview, 2019-2029 (USD Billion)
- Logistic Companies
Regional Overview, 2019-2029 (USD Billion)
- Rest of Europe
- Rest of Asia Pacific
- Rest of South America
The Middle East and South Africa