Third-party Logistics Market size is set to grow by USD 532.65 billion from 2023-2027, Growth of E-commerce and the need for integrated shipping services to boost the market growth, Technavio

NEW YORK, July 15, 2024 /PRNewswire/ — The global third-party logistics market  size is estimated to grow by USD 532.65 billion from 2023-2027, according to Technavio. The market is estimated to grow at a CAGR of almost 7.87%  during the forecast period.  Growth of e-commerce and the need for integrated shipping services is driving market growth, with a trend towards emergence of big data analytics. However, high operational cost and competitive pricing  poses a challenge. Key market players include AP Moller Maersk AS, Baltic Logistics Group, BDP International Inc., Burris Logistics Co., C H Robinson Worldwide Inc., CMA CGM SA, DB Schenker, Deutsche Bahn AG, Deutsche Post AG, DSV AS, FedEx Corp., GEODIS SA, Hub Group Inc., J.B. Hunt Transport Services Inc., Kintetsu Group Holdings Co. Ltd., Kuehne Nagel Management AG, Nippon Express Holdings Inc., Sinotrans Ltd., United Parcel Service Inc., and XPO Logistics Inc..

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Key Market Trends Fueling Growth

Logistics companies and shippers are utilizing big data analytics to extract valuable insights from extensive data sets, providing a competitive edge in the third-party logistics market. Big data analytics solutions enable companies to optimize operations, enhance customer experience, and explore new business models. In operational efficiency, real-time processing and predictive techniques improve capacity forecasting and resource control. Customer experience benefits from analyzing consumer sentiment and product quality data. Collaboration with supply chain partners using shared data leads to new services, demand pattern discovery, and enhanced forecasting accuracy. Real-time analytics and end-to-end supply chain visibility enable quick action against potential revenue losses. Big data analytics empowers logistics companies to optimize resources, increase asset uptime, and conduct near-real-time supply planning using IoT data feeds. 

The 3PL market in the logistics sector is experiencing significant growth due to increasing cross-border trade activities. Mergers and acquisitions are common as companies look to expand their reach and reduce costs. Poor infrastructure in some regions drives up logistics costs, leading to the adoption of IT solutions and software. Rising demand for consumer electronics, retailing, healthcare, and food and beverage products fuels growth. Railways, roadways, waterways, airways, and domestic/international transportation management are key areas of focus. Warehousing and distribution are essential elements in the 3PL market, with technological advancements streamlining operations. New trends include omni-channel operations, e-commerce sector growth, and the global shift towards new technologies. Shippers in industries like consumer goods, medical equipment, food, dairy, nutrition, beverage, and confectionery benefit from 3PL services. Despite challenges, the future looks bright for the 3PL market as it continues to adapt and innovate. 

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Market Challenges

• In the logistics industry, competition is intensifying due to the growing demand for value-added services and specialized solutions. Customers are pushing for lower prices when renewing contracts, while also requesting additional services. This puts significant pressure on third-party logistics (3PL) providers to reduce their costs. The industry’s capital-intensive nature, requiring large fleets, skilled labor, and advanced technology, increases operational expenses. Controlling these costs is crucial for 3PLs to remain competitive and maintain profitability amidst volatile fuel prices and customer demands.
• Third-party logistics (3PL) plays a crucial role in the global supply chain, particularly for industries like toy retailing and e-commerce services. Sustainability is a significant challenge, requiring 3PLs to adopt advanced technology and high-tech services for efficient warehouse management and reduced carbon footprint. Adaptability and responsiveness are essential in today’s dynamic business environment, with 3PLs providing multi-user logistics facilities for inbound and outbound logistics, after-sales, and return logistics. Emerging economies and growing populations present new opportunities, but also complexities. Digital transformation and technology adoption are vital for 3PLs to meet the demands of the food & groceries industry and the e-commerce market. Benchmarking, international deliveries, and delivery partners are key considerations for businesses seeking cost-effective and efficient logistics solutions. Challenges include freight-management, shipping services, and last-mile connectivity. Collaborating with ship-owners, cargo agents, and freight forwarders can help mitigate delays and improve delivery time. In-house teams and logistics software are essential for effective freight management, while after-sales and return logistics require a customer-centric approach. Ultimately, the success of a 3PL business model depends on money and effort invested in logistics, freight-management, and digital transformation.

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Segment Overview 

This third-party logistics market report extensively covers market segmentation by

1. Application
   • 1.1 Transportation services
   • 1.2 Warehousing and distribution services
   • 1.3 Other services
2. End-user
   • 2.1 Manufacturing
   • 2.2 Retail
   • 2.3 Consumer goods
   • 2.4 Healthcare
   • 2.5 Others
3. Geography
   • 3.1 APAC
   • 3.2 North America
   • 3.3 Europe
   • 3.4 South America
   • 3.5 Middle East and Africa

1.1 Transportation services- The transportation services segment in the global Third-Party Logistics (3PL) market provides various modes of shipping goods, including road, rail, air, and sea. Companies often outsource cargo and freight transportation due to the significant investment and expertise required. Contract 3PL providers offer efficient and timely transportation, providing a competitive edge. Services include freight forwarding, project logistics, network planning, cargo insurance, optimization, and customs brokerage. Technological innovations, such as IT systems, data analytics, fleet management, location detection, and autonomous vehicles, enhance flexibility and profitability. Intra-regional trade growth and manufacturing relocation increase demand for freight services, driving market potential. Vendors expand fleets and invest to strengthen capabilities and increase market shares, fueling the transportation services segment’s growth in the 3PL market.

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The global Spare Parts Logistics Market is driven by the increasing need for efficient supply chain management and the growth of the automotive and aerospace industries. The global Chemical Logistics Market is expanding due to rising demand for chemical products and the need for specialized handling and transportation solutions. The global Connected Logistics Market is growing rapidly, fueled by advancements in IoT and AI technologies, which enhance real-time tracking, inventory management, and overall supply chain efficiency, meeting the increasing demand for seamless logistics operations across industries.

Research Analysis

The Third-party Logistics (3PL) market is witnessing significant growth due to the increasing demand for efficient and cost-effective logistics solutions. With the global shift towards e-commerce and omni-channel operations, shippers in various industries such as consumer goods, food and beverage, medical equipment, and toy retailers are turning to 3PL providers for their logistics infrastructure needs. New technologies like digital transformation, benchmarking, and adaptability are driving operational excellence and responsiveness in the market. 3PLs offer shipping services, e-commerce services, and warehousing solutions, making them indispensable partners for businesses looking to streamline their supply chain activities. International deliveries and prompt response to consumer demands are key factors driving the market’s growth. Prominent vendors are investing in new technologies and business models to stay competitive and meet the evolving needs of their clients. Funds are also pouring in to support the digital transformation of the 3PL industry.

Market Research Overview

The Third-Party Logistics (3PL) market is a dynamic and evolving sector that plays a crucial role in the global supply chain. It caters to various industries, including food and beverage, consumer goods, medical equipment, and more. The market is experiencing a significant global shift due to the rise of omni-channel operations and the e-commerce sector. New technologies, such as advanced logistics software and freight-management systems, are transforming operations, making them more adaptable and responsive. Shippers benefit from 3PL services by outsourcing their logistics activities, including inbound and outbound logistics, after-sales, and return logistics. The food and groceries industry, in particular, is seeing a surge in demand for 3PL services due to the e-commerce market’s growth. Emerging economies and populations with increasing purchasing power are driving the demand for 3PL services. Digital transformation and technology adoption are also key trends in the market, with high-tech services becoming increasingly important. The 3PL market encompasses various players, from logistics infrastructure providers to shipping services, freight-forwarders, and cargo agents. Cost reduction, mergers, and acquisitions are prominent in the 3PL market, with trading activities and poor infrastructure leading to higher logistics costs. IT solutions and software are essential for improving efficiency and reducing delays in international deliveries. Last-mile connectivity and cross-border trade activities are also critical areas of focus for 3PL providers. In conclusion, the 3PL market is a vital component of the logistics sector, providing essential services to various industries and sectors, including food and beverage, consumer goods, medical equipment, and e-commerce. The market is undergoing significant changes due to technological advancements, digital transformation, and the rise of e-commerce. 3PL providers must adapt to these changes to remain competitive and meet the evolving needs of their customers.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Application
  • Transportation Services
  • Warehousing And Distribution Services
  • Other Services
• End-user
  • Manufacturing
  • Retail
  • Consumer Goods
  • Healthcare
  • Others
• Geography
  • APAC
  • North America
  • Europe
  • South America
  • Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio