Global Third Party Logistics Market Overview
The Global Third Party Logistics market is predominantly driven by rising growth of e-commerce sector coupled with rising transportation and shipping industry. Third party logistics is an outsourced logistics service offered by third party logistic company to enhanced logistics and supply chain management. The growth of this market is attributed to the growth in online sales and increasing consumer demand for faster delivery and lower prices have spiked demand for 3PL services. 3PLs have also flourished owing to advanced tracking technology such as RFID and GPS, both of which offer extended supply china visibility. In the meantime, internet of things (IoT) technology has improved tracking metrics for trucking and other carriers. The latest trend in this industry is rising adoption of cloud based tracking system in transportation.
Global Third Party Logistics market was valued at around USD 825 million in 2019 and expected to reach USD 1,650 million, growing at a CAGR of around 8.5% during the forecast period.
The key reason behind the growth of third party logistics is globalization coupled with vibrant market conditions and improvement in the infrastructure and global economy. In addition to this, expansion of online industry owing to rising penetration of internet and mobile along with growing number of warehouses and growth of logistics industry are expected to propel the market. The swift changes in retail and manufacturing business model coupled with adoption of advanced technologies is likely to offer noteworthy opportunities to the third party logistic market in the upcoming year. On the other side, lack of infrastructure, strict border rules about shipping and high taxes is estimated to act as a roadblock for the market growth.
Market players are focusing on strategic alliances such as collaborations and mergers & acquisitions to deliver improved service capabilities to their customers. The report studies few key players of the global Third Party Logistics market in detail covering the company profile, product list and financial details. The companies included in the report are Agility Public Warehousing Company, AmeriCold Logistics, LLC, BDP International, Burris Logistics, C.H. Robinson Worldwide (CHRW) Inc., CEVA Logistics, DB Schenker Logistics, DSV Panalpina A/S, Deutsche Post AG (DHL Group), Expeditors International of Washington, Inc. and FedEx Corporation.
The global Third Party Logistics market is segmented into service, transport, end-use and region.
By Service Analysis
Domestic Transportation Management segment held over 30% market share in 2019. Domestic transportation management services are accomplished in combination with freight intermediaries, which deal with shipment origin point to their shipping destination. The growing trade activities among the unloading dock to a warehouse, mounting carrier rates, growth in cross-docking services, and increasing fuel surcharge drive the growth of the DTM segment. The rising consumer demand in healthcare, pharmaceuticals, and retail, and the stable GDP growth of various countries is further supporting the segment growth.
By Transport Analysis
The roadways segment dominated the global third party logistics market with over 50% share in 2019. The segment is mainly driven by augmented significance on logistics infrastructure and rising public-private partnership model across diverse industries. Also, many government bodies’ initiatives are propelling the growth of roadways segment during the forecast period. Trade liberalization policies and cross-border logistics activities among neighbour countries have increased international trade, hence fuelling the segment growth.
By End-use Analysis
The manufacturing sector held the largest revenue share of 25% in 2019. Manufacturing and logistics work parallelly as the manufacturing industry has a complex supply chain process. The manufacturing industry comprises the procurement of raw materials and other parts from various resources across the globe. The participation of many suppliers and distributors make the logistics activity a tedious job. Hence, the manufacturing sector is outsourcing the logistics activities owing to the benefits offered in terms of reduced transportation cost, supply chain visibility, inventory and vendor management, business process development, and improved customer services.
By Region Analysis
On a regional level, Asia Pacific is projected to grow at a rapid pace during the forecast period. The rising trans-regional trade corridors are likely to create a new window of opportunity for the 3PL service providers. Further, the economic growth of developing countries such as India and China is another factor projected to propel the market growth. In addition to this, increasing investment by government authorities in roads, railways, and airways in order to develop the overall infrastructure for effective transportation is a factor expected to support the revenue growth of the target market in the region.
North America held the largest market share of over 25% in 2019. The growing demand for cold storage in the region is likely to lift-up the third-party logistics market. Moreover, the existence of key players, comprising C.H. Robinson Worldwide (CHRW) Inc., XPO Logistics, Inc., UPS Supply Chain Solutions Inc, and others help the regional market growth.
Market Segmentation covered in the Report:
- Dedicated Contract Carriage (DCC)/Freight forwarding
- Domestic Transportation Management (DTM)
- International Transportation Management (ITM)
- Warehousing & Distribution (W&D)
- Value-Added Logistics Services (VALs)
- North America
- Asia Pacific
- Latin America
- Middle East and Africa
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