The global Third Party Logistics (3PL) Market is expected to value at USD 1.24 trillion by 2025. The 3PL industry is subject to witness a substantial growth due to the recent technological advancement in the various logistics services, rising transportation activities in both developed and developing economies across the globe and increasing shipping demand.
The number of service providers are improving their supply chain capabilities due to numerous growth opportunities available, thereby driving market growth, in the recent years. Globally, the third party logistics industry is predicted to grow at higher CAGR in the forecast period, providing numerous opportunities for market players to invest for research and development in the 3PL market.
Additionally, shifting trends towards early adoption of advanced services such as automated freight payment and audit procedure to achieve cost-effectiveness are anticipated to drive the growth of third party logistics market over the forecast period. Other factors such as reduction of capital expenditure (CAPEX), risk management, better inventory management, and directing on the core competencies of different business operations.
Robust growth of third party logistics (3PL) industry is majorly attributed to the high-end international trade flow and the strong economic growth in the developing economies such as India, China and Brazil. Increasing transportation & infrastructural activates in the Asia Pacific and North America region is anticipated to boost market growth in the upcoming years. Additionally, intra-regional trade and international among developing economies across the globe coupled with higher growth rate in the Asia Pacific region are expected to drive the market growth of third party logistics over the forecast period.
Increasing adoption of various third party logistics services in various sectors such as manufacturing, retail, trade and transportation. Other application of the third party logistics services include private and local utility sector, healthcare industry, media and entertainment sectors. These factors are expected to foster market expansion of logistics industry over the forecast period. Recent adoption of thirds party logistics services in the telecommunication, banking and financial services, and information technology industry is estimated to expand overall market reach in the near future as well. In addition, development of latest technologies and introduction of novel products such as the freight brokers and different value-added services are driving market growth in the recent years.
The third party logistics (3PL) market is broadly categorized into major segments based on the service type such as Dedicated Contract Carriage (DCC)/Freight forwarding, Domestic Transportation Management (DTM), International Transportation Management (ITM), warehousing & distribution and value added logistics services. The Dedicated Contract Carriage (DCC)/Freight forwarding segment is growing rapidly in the third party logistics industry with substantial revenue generation in the last few years.
Growing popularity of Dedicated Contract Carriage (DCC)/Freight forwarding segment is attributed to the increased international and domestic trades. The International Transportation Management (ITM) segment has also witnessed substantial growth owing to the reduction in complexity & cost during international trades.
The third party logistics market is divided by region as North America, Europe, Asia-Pacific, Latin America and Africa. North America has shown major growth in recent years owing to the rise in the implementation of latest technologies, increase in number of research & development activities in the region and existence of well-established infrastructure.
Asia-Pacific region is estimated to hold major market share in third party logistics with massive growth in forecast period. Countries such as India, China, South Korea, Japan and Singapore are leading the Asia-Pacific market with strong economic growth, growing infrastructural activities, and significant investment by leading industry players considering potential growth opportunities in the region.
The key players in the third party logistics (3PL) industry are Kuehne + Nagel International AG, DHL Express AG, C.H. Robinson Worldwide, Inc., UPS Supply Chain Solutions, Inc., and FedEx Corporation.
3PL Service Outlook (Revenue, USD Billion, 2014 - 2025)
• Dedicated Contract Carriage (DCC)/Freight forwarding
• Domestic Transportation Management (DTM)
• International Transportation Management (ITM)
• Warehousing & distribution
• Value added logistics services
3PL Transport Outlook (Revenue, USD Billion, 2014 - 2025)
3PL End-Use Outlook (Revenue, USD Billion, 2014 - 2025)
3PL Regional Outlook (Revenue, USD Billion, 2014 - 2025)
• North America
• Asia Pacific
• Latin America
• Middle East and Africa
Research Support Specialist, USA