According to a report published by Grand View Research, Inc.; the third-party logistics (3PL) market is likely to reach a valuation of around USD 1.24 trillion by 2025. Increasing demand for outsourced-logistics functions, especially in middle market companies (retailers and wholesalers), to overcome logistics challenges can propel the market over the forecast period (from 2014 to 2025). The market for outsourced-logistics services is evolving toward cloud-based technologies and advanced services. The advent of Big Data and availability of market-specific logistic services are likely to be the major factors driving the demand for 3PL.
Major companies are implementing cloud-based Customer Relationship Management (CRM) applications to improve the shipper-vendor relationship and to decrease the supply chain complexities by making the process more transparent. Increasing automation in logistics services would also drive the market development as the implantation of automatic systems enable better logistics performance, efficiency, and error reduction. In addition, rising popularity of IoT-based services are projected to offer new growth opportunities for the 3PL market over the next few years.
Full Research Report On Third Party Logistics (3PL) Market Analysis:
The global third-party logistics market can be segmented on the basis of service, transport, end-use, and region. Based on service, the market can be categorized into Dedicated Contract Carriage (DCC)/freight forwarding, warehousing and distribution, Domestic Transportation Management (DTM), value added logistics services and International Transportation Management (ITM). On the basis of transport, the market can be segregated into roadways, railways, waterways, and airways. On the basis of end-use, the market can be classified into retail, manufacturing, automotive, healthcare, and others.
The retail sector would grow at a CAGR of 7.5 % from 2014 to 2024 due to the development of omni-channel retailing and the need for data-driven analytics solution for managing fleet and warehousing. Geographically, the market can be divided into North America, Asia Pacific, Europe, Latin America, Middle East and Africa. In 2015, Asia Pacific accounted for 29 % of the total 3PL market share on account of rapid economic growth in China and India. Factors such as GST implementation and growing e-commerce industry is driving the market growth in India.
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In addition, growing expenditure on roads, airways, and railways across the developing countries in the Asia Pacific region is also expected to boost the demand for logistics and warehousing during the forecast period. Besides, continuous retail formalization and the development of manufacturing units in the region are generating new growth opportunities for 3PL service providers. North American market is anticipated to witness a substantial expansion on account of growing demand for logistics software. Heavy investments for increased route optimization and visibility are anticipated to boost the demand for third party logistics services in the region.
In addition, high requirement for user-specific transportation and supply chain services for safeguarding coordinated movement of goods is driving the market demand in this region. Strict product tracking requirements along with the growing need for cold chain are also likely to support the regional market. Europe is expected to have a sluggish growth during the forecast period due to rising concerns regarding shortage of labor and talent management issues. The region has high demand for efficient logistics and is expected to offer more growth opportunities with the demand for these services in UK. Reformation of supply chain activities and the escalating e-commerce sector is expected to create opportunities in the region during the forecast period.
The Middle East is anticipated to account for 8.5 % of the overall revenue share in the coming years owing to rising import and export activities. Prominent companies operating in the market include FedEx Corporation; Kuehne + Nagel International AG; PS Supply Chain Solutions; C.H. Robinson Worldwide; and DHL. Many global third party logistics service providers are collaborating with local companies due to their command on regional market and to generate higher profit margins by reducing overhead costs.
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