Third Party Logistics (3PL) Market Size By Solution (Domestic Transportation Management, Dedicated Contract Carriage, International Transportation Management, Software, Warehousing & Distribution), By Mode (Air, Sea, Rail & Road), Industry Analysis Report, Regional Outlook, Application Potential, Price Trends, Competitive Market Share & Forecast, 2017 – 2024

Published Date: Jun 2017  |  Report ID: GMI132  |  Authors: Ankita Bhutani, Pallavi Bhardwaj

Report Format: PDF   |   Pages: 165   |   Base Year: 2016

Summary Table of Contents Industry Coverage Methodology

Industry Trends

3PL Market size was over USD 750 billion in 2016 and is predicted to grow at an estimated CAGR of 4.6% from 2017 to 2024.

U.S. 3PL Market Size, By Solution, 2016 & 2024 (USD Billion)
U.S. 3PL Market Size, By Solution, 2016 & 2024 (USD Billion)

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Rising demand for reducing the shipping costs accompanied with the focus on managing timely delivery of goods is anticipated to fuel the 3PL market over the forecast timeline. It helps in reducing the capital costs and enabling businesses to focus on their core competencies. 3PL services are not only restricted toward logistics, but also include value-addition services for the entire process from procurement to distribution to consumers, thereby establishing an efficient and effective supply chain. In addition, advanced IT solutions, such as Electronic Data Interchange(EDI) and Vendor Managed Inventory (VMI), offers visibility to inbound and outbound logistics operations and contributes to the growth of the 3PL market.

Various companies are actively investing in advanced software and smart devices for carrying out effective supply chain operations. This software helps in reducing the level of inconsistencies and errors, reducing the total time as well as the operational costs. Voice recognition systems are widely adopted in processes, such as stock enquiries and freight tracking, driving the 3PL market demand. The rising demand for voice picking solutions is rising among players as it enhances accuracy in warehousing operations, thereby positively influencing the industry. Moreover, it helps in exchanging spoken words with the help of headsets, allowing employees to focus on key tasks.

Third Party Logistics (3PL) Market Report Coverage
Report Coverage Details
Base Year: 2016
Historical Data for: 2013 to 2016 Forecast Period: 2017 to 2024
Pages: 165 Tables, Charts & Figures: 90
Geographies covered (12): U.S., Canada, Mexico, Germany, UK, France, Italy, China, India, Japan, Australia, Brazil
Segments covered: Solution, Mode and Region
Companies covered (25): AmeriCold Logistics LLC, BDP International, Burris Logistics, C.H. Robinson Worldwide, CEVA Logistics, DB Schenker Logistics, DHL Supply Chain, DSV A/S (UTi Worldwide, Inc.), Expeditors International of Washington, FedEx, GEODIS , J. B. Hunt, Kintetsu World Express, Inc. , Kuehne + Nagel International AG , Landstar System, Inc., Nippon Express Co. Ltd , Panalpina World Transport Ltd. , Ryder Supply Chain Solutions , Schneider National, Inc. , SinoTrans (HK) Logistics Limited, Total Quality Logistics, Inc. , Transplace Texas LP , Unyson Logistics, Inc., UPS Supply Chain Solutions , XPO Logistics, Inc.

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3PL Market, By Product

The logistics software product segment is anticipated to witness a significant growth over the forecast timeline in the 3PL market. This is due to the visibility offered by this software while monitoring the distribution and warehousing activities. It also aids in seamlessly managing the transportation, freight, and warehousing operations, supporting the widescale adoption of this software in the 3PL market.

The Domestic Transportation Management (DTM) product segment will grow at a CAGR of over 5% over the forecast timeline. Various companies are offering the service to give the leverage of selecting the transportation mode based on the commodity shipment requirements. This offers visibility to the customers, thereby building the brand name of the service provider in the 3PL market.

3PL Market, By Mode

The rail & road modes are generally used by service providers for domestic transportation management in the 3PL market. These service providers deliver transit options, cost saving opportunities, environment-friendly surface transportation mode, and alternative capacity. These benefits are encouraging governments to provide support to providers to adopt these modes. Rising economic conditions across the world are causing governments to increase investments in the port infrastructure.

Upward growth in online sales and e-commerce has prompted the rapid adoption of air as a mode of transportation. Customers are willing to pay premium prices to get their products delivered quickly and efficiently. Designer fashion accessories & apparels and high-end electronics make up for a good percentage of air cargo.

3PL Market, By Region

The Asia Pacific third party logistics market is anticipated to witness a significant growth owing to the strong roadways in the region, which enables the transit of a high volume of goods. Furthermore, the region serves as a manufacturing hub for various countries around the world, enabling the flow of goods to and from the manufacturing base. The penetration of various e-commerce companies, which offer logistics network for the delivery of products around the globe will offer opportunities for the 3PL market growth in the region. Innovative rail logistics solutions between Europe and China, such as the launch of the Beijing-London freight train route in February 2017, is predicted to boost the overall market and growth in the land logistics segment by enabling manufacturers to lower their transportation costs and expanding the shipping options.

The U.S. third party logistics market is characterized by the demand for low-cost services and outsourcing the services to third parties to primarily focus on the core competencies. The demand for efficient inventory management and rapid deliveries will surge the growth in the region. The U.S. will contribute toward the growth of the air freight owing to strong trade relations with other countries. The movement of sensitive goods, such as hazardous materials, time-dependent shipments, and delicate items from the U.S., requires the usage of air transportation, which is much faster and safer via sea or land.

Competitive Market Share

Industry players include FedEx, UPS Supply Chain Solutions, Kuehne + Nagel, Expeditors International, J.B. Hunt (JBI, DCS & ICS), and Deutsche Post DHL (Exel). These industry participants are working toward providing visibility in the processes to gain consumer confidence by delivering enhanced services. Cost cutting and technologically-advanced services are being widely adopted in the 3PL market. To gain market share and to expand the geographical reach, several companies are undergoing mergers and acquisitions in the industry. In January 2015, FedEx acquired GENCO, a third-party provider and rebranded as FedEx Supply Chain. This allowed FedEx to diversify its business to supply chain and logistics segment. In September 2016, C.H. Robinson acquired APC Logistics to expand its reach in Australia and New Zealand.

3PL Industry Background  

As the recent supply chains are becoming increasingly complex, many companies are turning toward 3PL market to confirm that the goods arrive at the customer's door and the retail store on time at the minimum possible cost. These solutions help these companies focus on their core competencies by outsourcing the logistics operations to 3PL service providers. Various service providers are offering these services by customizing and scaling them as per customers’ specific requirements based on their market conditions, the different demands and delivery cycles, and service requirements for their products or materials in the 3PL market.

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