$4550
$3640
The Third Party Logistics market was valued at US$ 899.4 Million in 2019 and is projected to reach US$ 1329.4 Million by 2027; it is expected to grow at a CAGR of 7.4% from 2020 to 2027.
Third party logistics is moving towards increased information base and large-scale operations owing to maximize operational efficiency and improve profitability. There is an improvement in the strategic nature of relationships between shippers and third-party logistics providers. Globally, 3PL firms are increasing their employee strength, organization skills, broadening their service offerings, investing in new technology, and expanding their geographical reach in order to deliver data driven solutions.
Moreover, 3PL firms are also implementing several software based solutions in their operations in order to reduce the inefficiency and costs with saving time for operations. Moreover, the implementation of speech recognition software in warehouse management system communications will support order turn-round and inventory records with reducing employee-training requirements. Along with this, acceptance of cloud-based technology in 3PL companies will respond demands by recognizing the need for customer access which is expected to better meet the seasonal trends efficiently. 3PL are the companies delivering single or multiple logistics services to a manufacturing company. Though 3PL firms do not hold the ownership of the product for distribution, however they are bound to accomplish the requested logistics activities of the purchasing company. 3PL is a significant part of today’s supply chain for small and large businesses. These firms provide services such as international & domestic transportation, inventory management, warehousing, distribution, order fulfillment, and freight consolidation. By outsourcing 3PL services, manufacturing companies are able to focus on product development, sales, and other core operations. 3PL offers immediate knowledge & expertise in the field, track on international logistics, and create cost savings. Increase in demand for shipping cost reduction & more focus on timely delivery management, reduction on company’s assets & permitting focus on core business, and advantage in managing seasonal variations are projected to drive the market for third party logistics during the forecast period. However, lesser control of manufacturers on logistic service and delivery process may adversely impact the market for third party logistics in near future. Moreover, the factor such as increase in adoption and growth of e-commerce in retail sector is projected to generate remarkable growth opportunity to the industry players.
Asia-Pacific dominated the third party logistics market in 2019, In 2018, Asia-Pacific dominated the global third party logistics market with more than one-third of the market share surpassing Europe with France and Japan being the leading countries in this region. This growth in demand for 3PL in this region is attributed to robust economic growth along with growing retail enactment owing to the rising disposable income. Moreover, foreign manufacturers select Asian countries as their production locations due to the availability of cheaper labor.
The factors such as continual urbanization, strong economic growth, and growth in middle-class population supported the growth in domestic consumption of fast-moving consumer goods for everyday consumption, personal automobiles, household items, and luxury items. This in turn increases the retail sales and makes Asia-Pacific the leading market for logistics service consumer. The services offered by 3PL firms add substantial value to the manufacturing companies. These firms help different companies to reduce weak points that outcomes in loss of revenue or profits and further help to assure maximal profitability. 3PL companies specialize in several logistics operations which offers network analysis, mode network optimization, warehousing, management of vendor compliance, and other logistic operations. In contrast with this, it is challenging for the core companies to gain such logistic expertise such as inventory management & storage, contract packaging, assembly needs, or shipping etc. in every business division.
Lucrative Regions for Third Party Logistics Market
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Market Insights
Rise in demand for reducing overall operational cost and focus on managing timely delivery
Logistics is the core area of the third party logistics (3PL) firms and their proficiency in this areas is always superior to that of the core companies. 3PL firms have the expertise to keep IT systems updated and deliver the logistic services more time & cost effectively along with this they own the ability to meet the technical requirements. Moreover, 3PL firms also help to reduce inventory cost and can strategize to reduce a company’s overall shipping & delivery costs as well. The core companies may not have that time or expertise to keep logistic services and systems updated. The company often face challenges meeting timely delivery of products during high business growth. Outsourcing logistic function from a third party is helpful for core companies as these firms manage and maintain warehouse, transportation, and other operations with more efficiently with expertise.
Mode of Transport-Based Market Insights
On the basis of mode of transport, the global third party logistics market is segmented into roadways, railways, waterways, and airways. Transportation is one of the most important service comprised in the 3PL operations. Efficient transportation is physically moving supplies in relatively safe manner on right time, in right condition, and in a cost effective manner. The role of transport is the movement of goods from the point of manufacturer or storage to the point of use or the distribution points to end use. The selection criteria of mode of transport is depends on the physical characteristics of goods and supplies. In certain situations, environmental factors such as destruction of roads and railways may have a considerable impact on the mode of selection. The factors considered in mode of selection would be speed which the mode exhibits, flexibility that the mode offers, and comparative unit cost.
Service-Based Market Insights
On the basis of service, the global third party logistics market is categorized into international transportation, warehousing, domestic transportation, inventory management, and others. Third party logistics (3PL) includes the storage and movement of goods to the different locations from point of origin supplier to intermediate and finally to end users. 3PL mainly focuses on the transportation of goods by different modes and warehousing. 3PL companies serve to extensive range of industries by providing innovative solutions and provide high value for their customers. The highly used outsourced services include warehousing, transportation, freight forwarding, and customs brokerage, along with several value-added services such as packaging, cross-docking, and shipment consolidation.
End User -Based Market Insights
On the basis of end user, the global third party logistics market is categorized into automotive, healthcare, retail, consumer goods, and others. Companies mainly outsource the functions of third party logistics (3PL) to achieve operational efficiencies, reduce overall cost, and focus on core competencies in manufacturing. The business requires increased local and regional market expertise in order to manage warehousing & transportation to expand business globally. Thus, 3PL service providers has the expertise in warehousing, distribution, and international transportation management delivers economies with operational backbone.
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Third Party Logistics Market: Strategic Insights
Market Size Value in US$ 899.4 Million in 2019 Market Size Value by US$ 1329.4 Million by 2027 Growth rate CAGR of 7.4% from 2020-2027 Forecast Period 2020-2027 Base Year 2020
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Third Party Logistics Market: Strategic Insights
| Market Size Value in | US$ 899.4 Million in 2019 |
| Market Size Value by | US$ 1329.4 Million by 2027 |
| Growth rate | CAGR of 7.4% from 2020-2027 |
| Forecast Period | 2020-2027 |
| Base Year | 2020 |
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Product development is the commonly adopted strategy by companies to expand their product portfolio. Deutsche Post AG, KUEHNE + NAGEL INTERNATIONAL AG, NIPPON EXPRESS CO., LTD., DB Schenker, and C.H. Robinson Worldwide, Inc. are among the key players implementing strategies to enlarge the customer base and gain significant share in the global Third Party Logistics market, which in turn permits them to maintain their brand name. A few of the recent key developments are:
- In 2020, DB Schenker expanded its activities near cargo centre at Luxembourg Airport. It is one of the largest airport in Europe. This new 7,000 m² logistics centre help the company to link its European and global network. The new distribution centre is expected to generate more than 100 jobs..
- In 2019, Nippon Express USA, Inc. established a new office in n Lexington, Kentucky. With the opening of the new office, the company is aiming to build a logistics network primarily targeting automobile companies and to provide its customers with optimal transport services.
Third Party Logistics Market Segmentation:
By Mode of Transport
- Roadways
- Railways
- Waterways
- Airways
By Service
- International Transportation
- Warehousing
- Domestic Transportation
- Inventory Management
- Others
By End User
- Automotive
- Healthcare
- Retail
- Consumer Goods
- Others
Company Profiles
- Deutsche Post AG
- KUEHNE + NAGEL INTERNATIONAL AG
- NIPPON EXPRESS CO., LTD.
- DB Schenker
- C.H. Robinson Worldwide, Inc.
- DSV A/S
- XPO LOGISTICS, INC.
- SINOTRANS CO., LTD.
- GEODIS
- UPS Supply Chain Solutions
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Mode of Transport , Services , and End User ; and Geography
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Saudi Arabia, South Africa, South Korea, Spain, United Arab Emirates, United Kingdom, United States
Frequently Asked Questions
In 2019, Asia-Pacific dominated the global third party logistics market with more than one-third of the market share surpassing Europe with France and Japan being the leading countries in this region. This growth in demand for 3PL in this region is attributed to robust economic growth along with growing retail enactment owing to the rising disposable income. Moreover, foreign manufacturers select Asian countries as their production locations due to the availability of cheaper labor.
Logistics is the core area of the third party logistics (3PL) firms and their proficiency in this areas is always superior to that of the core companies. 3PL firms have the expertise to keep IT systems updated and deliver the logistic services more time & cost effectively along with this they own the ability to meet the technical requirements. Moreover, 3PL firms also help to reduce inventory cost and can strategize to reduce a company’s overall shipping & delivery costs as well. The core companies may not have that time or expertise to keep logistic services and systems updated. The company often face challenges meeting timely delivery of products during high business growth. Outsourcing logistic function from a third party is helpful for core companies as these firms manage and maintain warehouse, transportation, and other operations with more efficiently with expertise. Also, 3PL eliminates the need to invest in technology, warehouse space, transportation, a trained staff in order to execute the logistics process. Additionally, hiring the third party firms is more cost-effective than investing in own logistic operations. Thus, reducing overall operational cost and managing timely delivery are expected to drive the market for third party logistics.
Transportation is an integral part of the logistic operations and a significant contributor to the logistic expenses. Each of the globally recognized company has their own supply chain and third party logistic (3PL) needs. Domestic 3PL provides their clients with the similar quality of services that internationally located 3PL companies’ offers to their clients. The technological advancement in 3PL system allow to deliver superior services to the clients irrespective of international or domestic.
The List of Companies - Third Party Logistics Market
- SINOTRANS Limited
- DB Group
- Deutsche Post Ag
- Geodis
- United Parcel Service, Inc. (Ups)
- XPO Logistics, Inc.
- Kuehne + Nagel International AG
- C.H. Robinson Worldwide, Inc
- DSV A/S
- Nippon Express Co., Ltd
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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