Third-Party Logistics Market - Industry Dynamics, Market Size, And Opportunity Forecast To 2027

Global Third-Party Logistics Market was valued at US$ 1,032 Bn in 2021 and is estimated to reach US$ 1,656.7 Bn by 2027. The market is registering growth at a CAGR of 8.2% during the forecast period 2022-2027. 

Market Snapshot

Third-party logistics (abbreviated as 3PL, or TPL) in logistics and supply chain management is an organization's use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services. Third-party logistics providers typically specialize in integrated operations of warehousing and transportation services that can be scaled and customized to customers' needs, based on market conditions, to meet the demands and delivery service requirements for their products. Services often extend beyond logistics to include value-added services related to the production or procurement of goods, such as services that integrate parts of the supply chain. A 3PL company can provide specialized services such as inventory management, cross-docking, door-to-door delivery, and packaging of products.

Market Dynamics

The growing impetus of the third-part logistics market is attributed to factors such as an increase in trade activities due to globalization and the rising focus of manufacturers and retailers on core competencies. The rise in globalization has aided in setting up a worldwide network of manufacturing activities. To maintain it efficiently, the demand for 3PL services is expected to rise. 3PL services are becoming extremely vital for price-sensitive customers who require a wider choice of high-quality products with timely delivery. Furthermore, the 3PL model provides greater asset utilization and asset sharing alliances, which is increasing its demand, thereby contributing toward the growth of the global market. Moreover, pooled warehousing is an emerging opportunity in the market. However, when businesses contract with 3PL services, it creates an issue of over-dependency. This dependency puts the client company in uncomfortable situations. 

Key Insights of the Report: 

• The latest study published by Astute Analytica analyzes the global third-party logistics market for the study period of 2017-2027; where historical years are 2017-2027, the base year is 2021, and the forecast period is 2022-2027.
• The research report offers a detailed study of market determinants including market drivers, restraints, opportunities, and trends; along with an attractive presentation in the form of impact analysis to gain a simpler and easy comparison view of all market determinants.
• The research study is a compilation of 14 chapters distributed across 145 pages with 52 lists of tables and 32 lists of figures.
• The market estimates are presented in terms of value (US$ Bn).
• Along with market estimations, the market study was conducted based on various economic models such as PESTLE and Porter’s five force models.
• Detailed value chain analysis of the industry was conducted. It includes supplier management, 3PL providers, and customer management.
• The competitive dashboard section includes analysis based on the Concentration Ratio (CR), based on market size and market presence of key companies.

Key Takeaways from the Global Third-Party Logistics Market Report

• In terms of mode of transport, the roadways segment has the highest market share in 2021 and is further estimated to continue its dominance over the forecast period. Several government initiatives are fueling the growth of the road transportation segment. The recent regulations imposed by the Federal Motor Carrier Safety Administration that allow the use of the cameras as a substitute for rearview mirrors are expected to benefit the truck drivers, in terms of safety.
• Based on services, the global third-party logistics market is categorized into Dedicated Contract Carriage (DCC), Domestic Transportation Management, International Transportation Management, warehousing & transportation, and others. Among these, Domestic Transport Management holds the highest share in 2021. The increasing trade movement among the unloading docks to a warehouse, escalating carrier rates, a surge in cross-docking services, and rising fuel surcharge are driving the growth of the DTM segment.
• The technological segment is the highest end-user segment of the third-party logistics market in 2021 and registers the highest CAGR during the forecast period 2022-2027. Mobile technology is revolutionizing 3PL. Many 3PL companies have already begun using mobile devices and apps to improve agility.
• The Asia Pacific is the highest shareholder in the Global Third-Party Logistics Market in 2021 and is further estimated to continue its dominance over the forecast period. Rapid urbanization and an increase in digitization in emerging countries such as India and China are key factors responsible for the growth of third-party logistics in the Asia Pacific region.
• The UAE third-party logistic market has a huge capacity to grow over the forecast period with a sustainable CAGR of approximately 9%, a figure higher than many of peer countries.

Competitive Landscape

• DHL International GmbH is a Germany-based company, which provides international delivery and logistics services. It offers air freight, overland transport, and sea freight services. In addition, it provides supply chain management services.
• Kuehne+Nagel Inc. is a world-leading logistics company, which along with its subsidiaries, provides integrated logistics services worldwide. It operates through four segments, including sea freight, airfreight, overland, and contract logistics. In addition, it offers import & export documentation, door-to-door, and logistics supply movement arrangement services.
• DB Schenker operates as a division of DB Group. It functions as a freight transportation company. It is involved in the transportation of chemicals, mineral oil, paper, metal, and coal. In addition, it provides services such as time & cost-optimized services for general cargo and partial & full load transport along with door-to-door solutions across Europe. Its services offered cover all stages of the value-added chain from supplier to producer/trade, to end customers, and spare parts service.
• Nippon Express is one of the leading providers of logistics service providers for various industries such as automotive, food, art, electric & telecommunication, aerospace & aviation, fashion & retail, and railway. It provides services related to transportation, and specialized transport. Transportation services include cross-border freight, ocean freight, air freight, and railway freight.
• FedEx Corporation is a U.S.-based company, which provides transportation, e-commerce, and business services worldwide. It operates through four segments, which include express, freight, ground, and service. In addition, it provides services, including sales, communications, marketing, information technology, and technical support services. Furthermore, it offers FedEx mobile, a suite of solutions to create shipping labels, track packages, view account-specific rate quotes, and access drop-off location information.

Segmentation Overview

The following are the different segments of the global third-party logistics market:

By Mode of Transport segment of the global third-party logistics market is sub-segmented into:

• Railways
• Roadways
• Waterways
• Airways

By Service segment of the global third-party logistics market is sub-segmented into:

• Dedicated Contract Carriage (DCC)
• Domestic Transportation Management
• International Transportation Management
• Warehousing & Distribution
• Others

By End User segment of the global third-party logistics market is sub-segmented into:

• Technological
• Automotive
• Retailing
• Elements
• Food & Groceries
• Healthcare
• Others

By Region segment of the global third-party logistics market is sub-segmented into:

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • Western Europe
    • The UK
    • Germany
    • France
    • Italy
    • Spain
    • Rest of Western Europe
  • Eastern Europe
    • Poland
    • Russia
    • Rest of Eastern Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • ASEAN
  • Rest of Asia Pacific
• Middle East & Africa (MEA)
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA
• South America
  • Argentina
  • Brazil
  • Rest of South America