The global third party logistics market was valued at USD 795 billion in 2017 and is anticipated to grow at a CAGR of 5.3% during the forecast period.
The outsourcing of some or all of a particular retailer’s logistics and supply chain to another company is known as Third Party Logistics or 3PL. This enables the company to focus on other important tasks of business development. With the rise in the modern-day supply chain and its complexity, the need for a smoother and more efficient logistics principle is essential. Third Party Logistics enable smaller businesses who do not own their independent logistics system to manage supply chain of a larger scale. 3PL independently manages stock control, warehousing, IT infrastructure, and delivery solutions. 3PL eliminates large scale outlay, while also increasing efficiency.
The rise in the worldwide trading activities as a result of massive globalization serves as a strong driver of the third party logistics market growth. This market is propelled by the need of manufacturers and retailers who choose to focus more on their core competencies. This leads to an overall rise in the e-commerce business and subsequently influence the third party logistics market growth during the forecast period. However, reluctance of retailers and manufacturers on independent companies for logistics operations hampers the market growth. The adoption and implementation of multi-modal systems may reduce time taken and increase efficiency of the process, boosting the adoption of 3PL. The use of IT solutions and software to digitize the process is expected to provide growth opportunities during the forecast period.
The global third party logistics market is segmented on the basis of service, mode of transport, end-user, and geography. Based on service, the market is segmented into Dedicated Contract Carriage, Domestic Transportation Management, International Transportation Management, Warehousing and Distribution, and others. The international transportation management segment accounted for the highest share of the global market in 2017 owing to rising international trades, need for increased efficiency in logistics and transportation activities, and rising trend of e-commerce.
The mode of transportation included in the report are roadways, railways, waterways, and airways. The end-users include retail, manufacturing, healthcare, and others. The retail segment dominated the global third party logistics market in 2017. The rising demand for e-commerce, and growing domestic and international trade from emerging economies boosts the growth of this segment.
This geographic distribution of the third party logistics market is across North America, Europe, Asia-Pacific, Latin America, and MEA. North America is further segmented into U.S., Canada, and Mexico. Europe is divided into Germany, UK, Italy, France, and Rest of Europe. Asia-Pacific is bifurcated into China, India, Japan, and Rest of Asia-Pacific. Asia-Pacific accounted for the highest share in the global third-party logistics market in 2017 owing to growing demand from retail and manufacturing sectors in the region.
The vendors in the market are launching new products to meet the growing customer needs. In addition, the leaders in the market are acquiring and collaborating with top companies in the market to enhance their offerings in the market and expand their customer base. The third party logistics market is highly competitive with the presence of a large number of small and large vendors. The leading players in the market include FedEx Corporation, Union Pacific Corporation, Kuehne+Nagel Inc., BNSF Railway Company, AmeriCold Logistics, LLC, Landstar System, Inc., Ryder System, Inc., Burris Logistics, DB SCHENKER Logistics, and CEVA Logistics.