Third-party Logistics Market: The implementation of Omni-channel distribution strategies by retailers has led to an increased demand for the services of third-party logistics providers

The Third-party Logistics Market size was valued at USD 1034 Million in 2022 and the total Third-party Logistics Market is expected to grow at a CAGR of 10.45% from 2023 to 2029, reaching nearly USD 2290 Million.

Third-party logistics refers to outsourcing logistics operations to a third-party provider. These providers specialize in handling different aspects of the supply chain, such as transportation, warehousing, and distribution. They work closely with the company to ensure that the supply chain is efficient, cost-effective, and meets the company's needs. Third-party Logistics providers typically offer a range of services, including transportation management, inventory management, order fulfilment, and freight forwarding. They may also offer value-added services such as packaging, labelling, and assembly. By outsourcing logistics operations to a third-party Logistics provider, companies can reduce their costs and focus on their core competencies. Third-party Logistics Industry players often have the expertise, technology, and network to optimize the supply chain and improve customer service.

The development of transport logistics infrastructure in the Asia and Middle East regions, the rapid growth of the e-commerce sector, and the development of new technologies are all expected to contribute significantly to the growth of the third-party Logistics market. Shippers are increasingly outsourcing their transportation activities to third-party logistics providers (third-party Logistics s) as a way to enhance their operations and cost-effectiveness. By partnering with a Third-party Logistics, shippers can benefit from their expertise, resources, & technology to optimize their supply chain operations and improve their transportation efficiency. In addition, the increased working capital and globalization are driving the demand for efficient inventory management services. With global supply chains becoming more complex, shippers are looking for ways to improve their inventory management practices to minimize carrying costs, reduce stockouts, and improve order fulfilment. This has led to the development of advanced inventory management systems that use data analytics, automation, and machine learning to provide real-time visibility into inventory levels, optimize inventory placement, and improve demand forecasting accuracy. As a result, these factors are driving the third-party logistics market growth across the world.

Asia is the world’s largest e-commerce (B2C) market in 2020 & 2024

The restructuring of the brick-and-mortar business model is also providing dynamic growth opportunities for the logistics industry. With the rise of e-commerce and the changing retail landscape, logistics providers are developing innovative solutions to meet the changing needs of retailers and consumers. This includes the development of new logistics services, such as micro-fulfilment centers, same-day delivery, and last-mile delivery solutions. Overall, the logistics industry is evolving rapidly to keep pace with the changing needs of shippers and consumers. By leveraging new technologies, developing innovative solutions, and adopting new business models, logistics providers are well-positioned to meet the challenges and opportunities of the future.

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Third-party Logistics Market Competitive Landscapes:
The Competition in third-party logistics industry is constantly evolving, with new players entering the market, and existing players expanding their offerings and capabilities. Some of the key players in the Third-party Logistics market include DHL Supply Chain, Kuehne + Nagel, DB Schenker, C.H. Robinson, UPS Supply Chain Solutions, XPO Logistics, and Expeditors. To stay competitive, Third-party Logistics providers are increasingly investing in technology and digital capabilities, such as predictive analytics, artificial intelligence & blockchain, to provide real-time visibility, optimize supply chain operations, and improve decision-making. Additionally, many Third-party Logistics providers are expanding their global reach by entering new markets, acquiring other companies, or partnering with local logistics providers to offer a more comprehensive and localized service.

There is also a trend towards specialization in the Third-party Logistics market, with providers focusing on specific industries or niche services, such as healthcare logistics, e-commerce fulfilment, or reverse logistics. By specializing in a particular area, Third-party Logistics providers can offer expertise and tailored solutions to their customers, helping them achieve better results and gain a competitive edge. Finally, sustainability and corporate social responsibility (CSR) are becoming increasingly important for third-party Logistics providers as customers demand more environmentally friendly and socially responsible logistics solutions. Many providers are investing in renewable energy, electric vehicles, and sustainable packaging solutions, while also implementing CSR programs and initiatives to improve their social and environmental impact. The competitive landscape in third-party logistics market is highly dynamic and constantly evolving. To stay competitive, Third-party Logistics providers must invest in technology, expand their global reach, specialize in niche services, and demonstrate their commitment to sustainability and CSR.
Third-party Logistics Market Dynamics:
The rise of e-commerce in North America is one of the major drivers of the Third-party Logistics industry.

The growth of e-commerce in North America has been significant in recent years and has contributed to the increased demand for third-party Logistics services in the region. According to MMR research study, e-commerce sales in North America amounted to $791.7 billion in 2020 and is expected to reach $1.15 trillion by 2023. This growth has created a greater need for logistics services, particularly in the areas of warehousing, fulfilment, and last-mile delivery. With more consumers shopping online, there is a greater demand for warehousing facilities to store and manage inventory. Third-party Logistics providers are responding by building more warehouses and distribution centers, often located closer to urban areas for faster delivery times. Fulfilment is another area where Third-party Logistics providers are playing a key role in the e-commerce industry. As online retailers face increasing pressure to deliver goods quickly and efficiently, many are outsourcing their fulfilment operations to third-party Logistics providers. These providers are able to handle the entire fulfillment process, from receiving orders to picking and packing items to shipping them to customers. Finally, last-mile delivery is a critical component of the e-commerce supply chain. With more consumers shopping online, there is a greater need for fast, reliable delivery options. Third-party Logistics market players are responding by investing in technology and infrastructure to improve their last-mile delivery capabilities, including the use of drones, autonomous vehicles, and other innovative solutions. The growth of e-commerce in North America has been a major driver of the Third-party Logistics industry in the region, creating new opportunities for providers to offer a wide range of logistics services to online retailers and other businesses.

Rising preference for efficient fleets to increase deployment of DC solutions

The growing preference for efficient fleets is likely to increase the deployment of DC (Distribution Center) solutions in the third-party logistics market. Efficient fleets can help companies reduce fuel consumption, lower transportation costs, and improve delivery times, which are all key factors in achieving operational efficiency. One way that logistics companies can optimize their fleets is by implementing telematics solutions, which use GPS and other tracking technologies to monitor vehicle performance, driver behavior, and fuel consumption. This data can then be used to optimize delivery routes, reduce idle time, and improve overall fleet efficiency. In addition to telematics, logistics companies can also use DC solutions to improve their operations. These solutions include warehouse management systems (WMS), transportation management systems (TMS), and order management systems (OMS), which can help companies optimize their supply chains, improve inventory management, and streamline their order fulfillment processes.

By combining efficient fleets with DC solutions, logistics companies can achieve even greater levels of efficiency and cost savings, while also improving customer service and satisfaction. As a result, we can expect to see continued growth in the deployment of DC solutions as companies seek to optimize their operations and compete in an increasingly competitive in third-party logistics market.

Rising demand for long-distance same-day deliveries to drive third-party Logistics use in air transport

The rising demand for long-distance same-day deliveries is likely to drive the use of third-party logistics providers in the air transport industry. With the increasing popularity of e-commerce, customers are expecting faster delivery times, and many are willing to pay a premium for same-day delivery services. This has put pressure on logistics companies to find ways to deliver goods faster and more efficiently, especially for long-distance shipments. Air transport offers several advantages for long-distance same-day deliveries, including faster delivery times, greater flexibility in scheduling, and the ability to bypass ground traffic congestion. However, air transport can also be more expensive than other modes of transportation, such as ground shipping or rail transport. To meet the demand for long-distance same-day deliveries, logistics companies are increasingly turning to third-party logistics market players that specialize in air transport. These providers have the expertise and resources to manage the complex logistics involved in air transport, including coordinating with airlines, managing customs clearance, and ensuring timely delivery.

In addition, third-party Logistics Induatry providers can help companies optimize their supply chains and reduce costs by consolidating shipments, using advanced logistics technologies, and providing real-time tracking and monitoring of shipments. The rising demand for long-distance same-day deliveries is likely to drive increased use of third-party Logistics providers in the air transport industry, as companies seek to meet customer expectations for fast, reliable delivery while also managing costs and optimizing their supply chains. As a result, these factors are driving the third-party logistics market growth across the world.

Third-party Logistics Market Opportunities

Increase in processed food consumption to boost adoption of 3PL in F&B applications.

The increasing consumption of processed food is expected to boost the adoption of third-party logistics (3PL) in the food and beverage (F&B) industry. This trend is driven by a number of factors, including changing consumer preferences, growing urbanization, and the need for improved supply chain efficiency. One of the main advantages of 3PL in the F&B industry is that it allows companies to outsource their logistics operations to specialized providers, who can handle the storage, transportation, and distribution of food products. This can help companies to reduce their operational costs, improve their supply chain efficiency, and enhance their customer service. The increasing consumption of processed food is expected to drive the adoption of 3PL in the F&B industry. By working with 3PL providers, companies can improve their supply chain efficiency, reduce their operational costs, and enhance their customer service, ultimately driving growth and profitability in the industry.
Third-party Logistics Market Segment Analysis:
Based on End Use, the Third-party Logistics Market is segmented into Manufacturing, Automotive. Manufacturing segment accounted for the largest market share in 2022. The manufacturing segment is one of the largest end-users of 3PL services. This is because manufacturers often have complex supply chain operations that require specialized logistics expertise. 3PL providers can help manufacturers to streamline their logistics operations, reduce their costs, and improve their overall supply chain efficiency. Some of the specific services that 3PL providers offer to the manufacturing segment include inventory management, warehousing and distribution, transportation, and value-added services such as kitting and assembly.

The automotive industry is another important end-user of 3PL services. This is because the automotive supply chain is highly complex and requires specialized logistics expertise. 3PL providers can help automotive companies to optimize their supply chain operations, reduce their costs, and improve their delivery times. Some of the specific services that 3PL providers offer to the automotive industry include inbound logistics, sequencing and kitting, warehousing and distribution, and aftermarket logistics. The third-party logistics market is driven by a range of end-use industries, each with its own specific logistics requirements. By offering specialized logistics expertise and services, 3PL providers are able to help these industries to improve their supply chain efficiency, reduce their costs, and enhance their customer service.

Based on Transport, the Third-party Logistics Market is segmented into Roadways, Airways. The Roadways segment is expected to grow at significant growth rate through the forecast period. Road transportation is often the most flexible and cost-effective mode of transportation, particularly for short to medium distance shipments. This makes it a popular choice for many shippers, particularly those operating within a single country or region. The growth of e-commerce and online retailing has led to an increase in demand for last-mile delivery services, which are often provided by road transport. As more consumers shop online and expect faster delivery times, the demand for road transport is expected to continue to grow. The road transport sector has also seen significant technological advancements in recent years, particularly with the emergence of digital platforms that allow shippers to easily connect with carriers and manage their transportation operations more efficiently. This has helped to further boost the growth of the road transport segment within the third-party logistics market.


Third-party Logistics Market Regional Insights:
Asia-Pacific held the largest market share of the global third-party Logistics market in 2022. The Asia-Pacific region is expected to witness significant growth in the third-party Logistics market during the forecast period, driven by the increasing demand for logistics services in emerging economies such as China and India. The region's growth is primarily driven by the expanding e-commerce industry and the need for efficient supply chain management. The Asia-Pacific region has a vast and diverse consumer base, which has led to the growth of the e-commerce industry. E-commerce companies require fast and reliable logistics services to deliver products to consumers, which has led to an increased demand for third-party Logistics services in the region.

China and India are two of the fastest-growing economies in the world, with rapidly expanding middle-class populations that are driving demand for consumer goods. These economies have a vast and complex logistics infrastructure, which requires sophisticated supply chain management solutions to operate effectively. Third-party logistics market players play a critical role in meeting the logistics needs of businesses in these countries, providing customized solutions that cater to their specific requirements. Moreover, the Asia-Pacific region has seen significant investments in infrastructure development, such as the construction of new airports, seaports, and highways. This has helped in the growth of the 3PL market in the region, as it has facilitated the movement of goods across the region. The Asia-Pacific third-party logistics market is expected to continue its growth trajectory, driven by the expanding e-commerce industry, the need for efficient supply chain management, and the development of advanced technologies such as artificial intelligence and blockchain.
Third-Party Logistics Market Scope: Inquire before buying



Third-party Logistics Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2017 to 2022
Market Size in 2022:
USD 1034 Million


Forecast Period 2023 to 2029 CAGR:
10.45%
Market Size in 2029:
USD 2290 Million


 Segments Covered:
by End Use
• Manufacturing
• Automotive


by Service
• DTM
• ITM
• VALs


by Transport
• Roadways
• Airways



Third-party Logistics Market Key Players:
• DHL Supply Chain & Global Forwarding
• Kuehne + Nagel International AG
• C.H. Robinson Worldwide, Inc.
• DB Schenker
• UPS Supply Chain Solutions
• Nippon Express Co., Ltd.
• XPO Logistics, Inc.
• Sinotrans Limited
• CEVA Logistics
• Expeditors International of Washington, Inc.
• DSV Panalpina A/S
• Geodis
• J.B. Hunt Transport Services, Inc.
• Ryder System, Inc.
• Agility

FAQs:

1] What segments are covered in the Global Third-party Logistics Market report?
Ans. The segments covered in the Third-party Logistics report are based on End Use, Service, Transport and Region.

2] Which region is expected to hold the highest share in the Global Third-party Logistics Market during the forecast period?
Ans. The North America region is expected to hold the highest share of the Third-party Logistics market during the forecast period.

3] What is the market size of the Global Third-party Logistics by 2029?
Ans. The market size of the Third-party Logistics by 2029 is expected to reach US$ 2290 Mn.

4] What is the forecast period for the Global Third-party Logistics Market?
Ans. The forecast period for the Third-party Logistics market is 2023-2029.

5] What was the market size of the Global Third-party Logistics in 2022?
Ans. The market size of the Third-party Logistics in 2022 was valued at US$ 1034 Mn.