The study undertaken by Astute Analytica foresees a tremendous growth in revenue of the market for global third-party logistics market from US$ 1,032 Billion in 2021 to US$ 1,656.7 Billion by 2027, registering a CAGR of 8.2% during the forecast period 2022-2027. The growth of the market is majorly driven by the increase in trading activities due to globalization and rise in focus of manufacturers and retailers on core competencies. Third-party logistics or 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 in order to meet the demands and delivery service requirements of 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.
Depending on mode of transportation, roadways segment is projected to be the highest contributor to the market by 2027. The airways segment is estimated to reach at a CAGR of 16.1% during the forecast period owing to growing preference for air transport globally. Moreover, in terms of service domestic transportation management segment was the highest contributor to the market in 2021 owing to growing trade movement and increasing carrier charges. The dedicated contract carriage (DCC) segment is expected to grow at the highest CAGR of 10.3% during the projected period. Furthermore, by end user the technological segment is estimated to hold the largest market share due to increasing demand of third-party logistics by technological companies around the world. Also, Asia Pacific held the major share in the global third-party logistics market in 2021 and is expected to project the highest CAGR of 8.9% during the forecast period. Rapid urbanization and increase in digitization in emerging countries such as India and China are key factors responsible for the growth in Asia Pacific region.
Market Dynamics and Trends
Drivers
Global third-party logistics market is majorly driven by factors such as increase in trading activities due to globalization and rise in focus of manufacturers and retailers on core competencies. Dynamic market conditions and rapidly improving global economy are the key factors driving globalization. Various activities related to trade have been witnessed to increase, owing to rise in globalization. Hence, manufactures or retailers find it difficult to keep a track of these activities in an efficient manner, 3PL companies help these manufacturers to keep a track and control these activities. This factor is expected to drive the growth of the 3PL market. Also, development of the overseas market is a significant factor that further fuels the growth of the industry. Thus, increase in trading activities due to globalization fuels the growth of the global 3PL market. Moreover, the need for 3PL service providers is expected to increase in the upcoming years as the management of supply chain is extremely difficult for manufactures. 3PL model provides greater asset utilization and asset sharing alliances, which is increasing its demand and thereby contributing toward the growth of the global market.
Restraint
Issues over dependency and loss of direct control are expected to hinder the market growth during the forecast period. When businesses contract with 3PL services, it creates a dependency therefore businesses need a reliable structure to function. This dependency puts the client company in uncomfortable situations, if pricing schemes or service reliability from the 3PL service is not working out as expected. As a result, companies restrain from working with a 3PL player.
Regional Analysis
Mexico is expected to project a fastest CAGR in the North America Third Party Logistics Market during the forecast period
U.S. held the major share in the North America third party logistics market in 2021 whereas, Mexico is expected to project a fastest CAGR of 8.5% during the forecast period. On the basis of mode of transportation, roadways segment holds a majority of the revenue in the third-party logistics industry in North America owing to increasing emphasis on logistics infrastructure. Moreover, technological industry on the basis of end user is estimated to project the highest CAGR during the forecast period. The region has a presence of some of the major production units of third-party logistics therefore, significantly contributing in the market growth.
China is the highest shareholder in the Asia Pacific Third Party Logistics Market
China held the major share in the Asia Pacific third party logistics market in 2021 and is expected to project the highest CAGR of 9.6% during the forecast period. On the basis of mode of transportation, airways segment is estimated to project the fastest during the forecast period owing to growing preference of air transport owing to speedy transport of goods especially medical equipment.
Technological industry segment holds a majority of revenue in the Middle East & Africa Third Party Logistics Market
On the basis of end user, technological industry segment holds a majority of the revenue in the third-party logistics industry and is estimated to project the fastest CAGR of 9.8% during the forecast period owing to increasing demand of third-party logistics by technological companies. Whereas, Saudi Arabia is expected to project the highest CAGR in the MEA third-party logistics market during the forecast period.
Brazil is expected to project a fastest CAGR in the South America Third Party Logistics Market during the forecast period
Brazil held the major share in the South America third party logistics market in 2021. On the basis of mode of transportation, roadways segment holds a majority of the revenue in the third-party logistics industry in South America. Whereas, based on service segment, dedicated contract carriage segment is projected to grow at a fastest CAGR of 9.6% during the forecast period.
Competitive Landscape
Global Third-Party Logistics Market is highly competitive in order to increase their presence in the marketplace. Some of the key players operating in the global market include DHL Supply Chain & Global Forwarding, KNL, DB Schenker, Nippon Express, C.H. Robinson, Agility, Landstar System. Inc, Ryder System. Inc, Nippon Express Co., Ltd and DSV Panalpina among others.
Segmentation Overview
Global Third-Party Logistics Market is segmented based on mode of transport, service, end user and region. The industry trends in global third-party logistics market are sub-divided into different categories in order to get a holistic view of the global third-party logistics market.
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:
By Service Segment of the Global Third-Party Logistics Market is Sub- Segmented into:
By End User Segment of the Global Third-Party Logistics Market is Sub- Segmented into:
By Region Type Segment of the Global Third-Party Logistics Market is Sub- Segmented into:
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