3PL Market Size worth over $1.8 trillion by 2026
Published Date: January 29, 2020 Authors: Preeti Wadhwani, Saloni Gankar
3PL Market size is set to surpass USD 1.8 trillion by 2026, according to a new research report by Global Market Insights, Inc.
3PL services allow companies/businesses to outsource their supply chain activities such as logistics and distribution. 3PL providers offer specialized services including the packaging of products, door-to-door servicing, and inventory management. Rapid development of the e-commerce sector has driven importance of speedy and last-mile delivery systems. Manufacturers’ interest to focus on core business and subcontracting their supply chain activities are driving the market demand.
In 2019, air-based logistics services accounted for around 40% of the global 3PL market. The growing market demand for shorter shipping time, economic development, and rising trade activities between several countries is driving the usage of air-based logistics services. According to the International Air Transport Association (IATA), the global airways freight market experienced a growth of 2.3% between August 2017 to August 2018. Moreover, in 2018, air cargo revenue increased by 15% due to the growing international e-commerce market.
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Reduction in operating costs by DCC service providers is driving the market demand
Dedicated Contract Carriage (DCC) solutions allow manufacturing companies to reduce supply chain operations costs and the burden of managing a personal fleet & team. Increasing service & product demands owing to change in consumer buying behavior has encouraged businesses/companies to implement these services, which is expected to drive the market size by 2026. Companies such as Target Logistics (Pvt) Ltd., The Kroger Co. and Walmart Inc. use 3PL services to reduce their operational costs and to increase transfer liability.
Browse key industry insights spread across 200 pages with 153 market data tables and 36 figures & charts from the report, “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” in detail along with the table of contents:
Delivery of goods at through sea mode is gaining popularity
Several government administrations are increasing the investments in port infrastructure. Long distance movement of goods by companies with limited financial resources are driving the market growth. Intermodal services provided by the 3PL providers is predicted to be very high as compared to other modes. Most businesses seeking 3PL services demand contract logistics that are solely devoted on the provision of multiple modes and are solely developed for these businesses.
The growing demand for low-cost logistics services is propelling the Asia Pacific market size
In 2019, North America accounted for around 25% of the 3PL market revenue. The industry is experiencing high demand for low-cost logistics services owing to the rapidly increasing e-commerce sector. The demand for tailored transportation and faster product delivery for ensuring coordinated movement of goods is being witnessed. Strong trade relations of the U.S., Canada and Mexico with other countries will also contribute towards the air freight services market growth in the region.
Market players are collaborating with regional and local companies to sustain in the market
Prominent market players operating in the market include C.H. Robinson, DB Schenker, DHL, Nippon Express, FedEx, UPS Supply Chain Solutions, JB Hunt, UPS, XPO Logistics, Kuehne + Nagel, Expeditors International, Gefco, Kintetsu World Express, Dachser, SNCF Geodis, Deutsche Post DHL (Exel), Sinotrans, CEVA Logistics, and Panalpina, among others. These 3PL firms are focusing on strategic alliances to sustain in a highly competitive market. For instance, GlobalTranz acquired seven companies between 2017-2018. With this acquisition, the company is currently one of the tenth largest freight brokerages in the U.S. market and has registered 62% revenue growth.
Growing popularity and size of the e-commerce sector has increased importance of smooth supply chain process and created tremendous opportunities for the 3PLs providers. Emerging technologies such as 3D printing, IoT, drone delivery, autonomous vehicles and Augmented Reality (AR) will revolutionize the service offerings provided by 3PL vendors over the forecast period.
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