The global third party logistics market is anticipated to garner $xx Bn by the end of 2022, registering a CAGR of xx% during the forecast period of 2018-2025. Third Party Logistics (3PL) facilitates a manufacturer to outsource activities related to logistics and distribution. A 3PL company doesn’t confine its services to logistics and distribution, it has wider spectrum of specialized services like cross-docking, inventory management, packaging of products and door to door delivery. This is basically opted for management of procurement and fulfillment activities that involves storing or shipping items.
- third party logistics market size is expected to stretch owing to its use in present competitive environment. The demand is expected to rise due to the higher focus of retailers and manufacturers on their core competencies and subcontracting activities. Thus, competition has diverted the agenda of manufacturers to their own specializations in distribution and production.
Furthermore, globalization has strengthened the worldwide network of manufacturing activities. Efficient maintenance of it demands 3PL companies to grow. Scope of 3PL services has expanded with higher productivity gains in supply chain in terms of reliability and cost with the help of IT and managerial expertise offered by 3PL companies.
- of the other prevalent factors including reverse logistics operations and e-commerce industry are driving 3PL market. However, potential loss of reputation and loss of direct control on the logistics service has restricted growth of 3PL market. The market of 3PL has influence of fragmentation and plenty of room for growth. In a small time frame, number of orders received has increased which is a challenge as well as an opportunity for the 3PL companies to meet the demands within the low-cost with the help of multi-distribution channel.
Increasing Dependency on Third Party Logistics
The key benefit of using a 3PL service is to effortlessly handle logistics including warehousing, fulfillment, packaging and distribution, is cost-effectiveness – for instance, company that lack the capability to maintain a warehouse or a staff to conduct supply chain operations can be satisfied with 3PL services.
A 3PL service provide gives higher performance on efforts such as shipping along with easy ability to scale its operations. In a situation where sudden requirement occurs for publishing company to ship extra copies of a popular title, comparatively a fulfillment center can readily meet the demand.
In the forecast period, the competitive dynamics in the third party logistics industry is anticipated to change drastically with the stepping budding entrepreneurs into the market. Most of the companies of 3PL are based out in North America region as well as in the Europe. However, there is still significant presence of market players in the developing regions such as Europe and Asia-Pacific backing with the vigorous economic growth as well as escalating retail enactment because of the upsurge disposable income and rising preference towards a non-asset based business models from manufacturing companies. Moreover, China, UK, France, Brazil, Japan and U.S. hold strong third party logistics market share.
Prevalent Steps from Well-Known Industry Giants
In reference to the statement from, Evan Armstrong, president of the consultancy Armstrong & Associates, it’s concluded that “the 3PL market is still ripe for equity investment. The one outstanding example of this was when Aerospace, Transportation and Logistics [ATL Partners] bought a controlling share of Pilot Freight Services late last year,” he says. He stated that, “We also anticipate more M&A activity as 3PLs strive to expand geographic scale and provide integrated solution offerings. At the same time, technological changes are having a dramatic impact on 3PL operations.” He also added, “This year’s electric logging devices [ELD] mandate could also be a boon for shipment tracking and carrier capacity monitoring information.”
High-profiled firm like projec44, MacroPoint and others got the potential to drive the enhanced transit status data and carrier capacity information, from transportation providers to prominent logistics companies.
Regional Overview, 2018-2028 (USD Billion)
- North America
- Rest of Europe
- Asia Pacific
- Rest of Asia-Pacific
- Middle East and Africa
- South Africa
- Rest of Middle East and Africa
- South America
- Rest of South America