Third-Party Logistics (3PL) Market Size By Solution (Dedicated Contract Carriage (DCC), Domestic Transportation Management (DTM), International Transportation Management (ITM), Warehousing & Distribution, Logistics Software), By Mode (Air, Sea, Rail & Road), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2020 – 2026

Published Date: Jan 2020  |  Report ID: GMI132  |  Authors: Preeti Wadhwani, Saloni Gankar

Report Format: PDF   |   Pages: 200   |   Base Year: 2019




Summary Table of Contents Industry Coverage Methodology

Industry Trends

Third-Party Logistics (3PL) Market size exceeded USD 1 trillion in 2019 and is estimated to grow at a CAGR of 9% between 2020 and 2026. The market growth is attributed to rising trend of globalization, encouraging several companies to outsource their logistics activities to third-party suppliers.
 

Third-party logistics services help organizations to focus on their core business and generate high revenue by reducing operating costs. These services also offer value addition to companies for the entire process of the supply chain, resulting in an efficient & effective supply chain. The growing trend of e-commerce in the market has resulted in the increased freight transportation and has created several industry opportunities for 3PL providers.
 

Third-Party Logistics (3PL) Market

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E-commerce sector sales are continuously increasing and fueling customer demands. According to the United Nations statistics, e-commerce sales grew by 13% reaching USD 29 trillion in 2019. Moreover, last minute deliveries in the market are becoming more complicated as customers are expecting fast shipping and have become more specific regarding their delivery demands. As a result, the supply chain has become an important part of the business, encouraging shippers to turn to 3PL providers to fulfill last-mile requirements to meet customer demands.
 

Third-Party Logistics (3PL) Market Report Coverage
Report Coverage Details
Base Year: 2019 Market Size in 2019: 1 trillion (USD)
Historical Data for: 2016 to 2019 Forecast Period: 2020 to 2026
Forecast Period 2020 to 2026 CAGR: 9% 2026 Value Projection: 1.8 trillion (USD)
Pages: 200 Tables, Charts & Figures: 189
Geographies covered (25): U.S., Canada, Mexico, UK, Germany, France, Italy, Spain, Netherlands, Switzerland, Russia, China, India, Japan, Indonesia, South Korea, Australia, Brazil, Argentina, Chile, Colombia, Saudi Arabia, Turkey, UAE, South Africa
Segments covered: Solution and Mode
Companies covered (25): AmeriCold Logistics LLC, BDP International, Burris Logistics, C.H. Robinson Worldwide, DB Schenker Logistics, DHL Supply Chain, DSV A/S (UTi Worldwide, Inc.), Echo Global Logistics, Expeditors International of Washington, FedEx, GEODIS, J. B. Hunt, Kintetsu World Express, Inc., Kuehne + Nagel International AG, Landstar System, Inc., Nippon Express Co., Ltd., Penske Logistics, Inc., 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.
Growth Drivers:
  • Growing applications of reverse logistics in retail industry
  • Technological advancements in logistics and SCM in the U.S.
  • Rising demand from manufacturing industry to manage inventory and supply chain in Europe
  • Government initiatives encouraging the Asia Pacific market growth
  • Emerging e-commerce industry in South America and MEA
Pitfalls & Challenges:
  • Lack of logistics control
  • Risks associated with cross border transportation

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The growing demand for international & domestic trade is propelling the U.S. third party logistics market growth

The DTM and ITM solutions accounted for around 70% of the U.S. 3PL market share, owing to rise in globalization which has resulted in increasing domestic & international trade.
 

According to the WTO, merchandise exports for the U.S. increased to USD 1.66 trillion in 2018, from USD 1.54 trillion in 2017. With the growing trade activities, customers are demanding efficient operations and timely delivery of products.
 

3PL providers are opting for DTM solutions to reduce the costs and complexity of their business operations. For effective & efficient management of the transportation process, various companies are adopting these systems. The market players are collaborating with local players to use their regional capabilities in logistics.
 

For instance, in October 2018, Transplace, a 3PL provider in the U.S. acquired subsidiary of Japan-based company Yusen Logistics (Americas) Inc. to expand its industry footprint and intermodal network. As a result of this acquisition, the company recorded revenue growth of over 30% in 2019.
 

Increasing international e-commerce activities are driving the usage of rail & road modes in the 3PL market

Global 3PL market by mode

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In 2019, the rail & road accounted for around 25% of the global third-party logistics (3PL) market. These modes provide companies cost saving opportunities, environment friendly surface transportation mode and high capacity, encouraging government administrations to provide support to encourage the 3PL providers to adopt these modes.
 

For instance, launch of rail freight carrier service from London to Beijing has allowed the use of rail for international transport and trade between Asia Pacific and Europe. Such initiatives are providing several opportunities to market players.
 

The rail & road mode is being widely used for domestic transportation in third-party logistics services. Freight transport by road helps in making efficient deliveries 24/7 irrespective of airport, port, and railway operating schedules. Flexible routing systems and cargo tracing by using modern GPS navigation systems are being implemented in 3PL rail & road transportation modes.
 

Moreover, for short-distance goods delivery, the transportation by road minimizes transportation cost. Increasing investments to develop road transportation networks and government initiatives are boosting the market demand.
 

Government initiatives in Asia Pacific has led to export-oriented industrialization

Asia Pacific 3PL market

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The Asia Pacific third-party logistics (3PL) market size will expand at over 10% CAGR over the forecast timespan owing to strong roadways in the region, enabling the transit of a high volume of goods. The rapid increase in the number of start-ups in the region due to steady economic growth is also contributing to the market revenue. The region has become the manufacturing hub for various countries around the world driving the demand for third-party logistics services. Moreover, the demand for faster product delivery and tailored transportation from international players for ensuring coordinated movement of goods will drive the market value.
 

Moreover, the regional governments are encouraging export by reducing taxes. For instance, the government in Japan reduced the tax on exported revenues by 80%. This has resulted in smooth flow of goods to and from the manufacturing base. As a result, the demand for 3PL services has increased in the region, driving the market growth.
 

However, due to U.S.-China trade war in 2019, tariffs increased by 25% (from 10%) on China-based products. The tariffs are impacting a wide variety of consumer goods compelling the regional industry players in China to focus on domestic operations instead of international operations.
 

Strategic mergers and acquisition remain key growth strategies for the market players

Market players are focusing on strategic alliances such as collaborations and mergers & acquisitions to deliver enhanced service capabilities to their customers. In June 2018, CJ Logistics acquired DSC Logistics to expand its presence in the Asian market, especially in Vietnam, Thailand, and China. The company registered 44% of market growth after its acquisition.
 

Also, in April 2018, Ryder System, Inc. acquired MXD Group e-commerce fulfillment facilities to expand its reach in North America. As a result of this acquisition, the company owns 121 e-commerce hubs covering over 95% of the U.S. and Canada, which has improved Ryder’s third-party logistics services and the company recorded a revenue growth of 23% in 2019.
 

Some key players operating in the 3PL market include FedEx, UPS Supply Chain Solutions, DHL, DB Schenker, Nippon Express, C.H. Robinson, XPO Logistics, UPS, JB Hunt, Expeditors International, Kuehne+Nagel, Expeditors International, Dachser, CEVA Logistics, Sinotrans, Panalpina, SNCF Geodis, Gefco, Kintetsu World Express, and Deutsche Post DHL (Exel).
 

The third-party logistics (3PL) market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2016 to 2026 for the following segments:

Market by Solution

  • Dedicated Contract Carriage (DCC)
  • Domestic Transportation Management (DTM)
  • International Transportation Management (ITM)
  • Warehousing & distribution
  • Logistics software

Market by Mode

  • Air
  • Sea
  • Rail & Road

The above information has been provided on a regional and country-level basis for the following:

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Russia
    • Spain
    • Netherlands
    • Switzerland
  • Asia Pacific
    • China
    • Japan
    • India
    • Indonesia
    • South Korea
    • Australia
  • South America
    • Brazil
    • Argentina
    • Colombia
    • Chile
  • MEA
    • Saudi Arabia
    • Turkey
    • UAE
    • South Africa

 

Frequently Asked Questions (FAQ) :

The market size of 3PL was valued over USD 1 tillion in 2019.
The industry share of 3PL is projected to expand at 9% CAGR during 2020 to 2026.
The APAC market will expand at over 10% CAGR during the forecast timespan owing to strong roadways in the region, enabling the transit of a high volume of goods.
In 2019, the rail & road mode accounted for around 25% of the global market as these modes provide cost saving opportunities, environment friendly surface transportation mode and high capacity.
Key industry players include FedEx, UPS Supply Chain Solutions, DHL, DB Schenker, Nippon Express, C.H. Robinson, XPO Logistics, UPS, JB Hunt, Expeditors International, Kuehne+Nagel, Expeditors International, Dachser, CEVA Logistics, Sinotrans, Panalpina, SNCF Geodis, Gefco, Kintetsu World Express, and Deutsche Post DHL (Exel).

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Premium Report Details

  • Published Date: Jan 2020
  • Pages: 200
  • Tables: 153
  • Charts / Figures: 36
  • Companies covered: 25
  • Countries covered: 25

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