Third-Party Logistics Market is Projected to reach US$ 1,656.7 Bn by 2027 | CAGR: 8.2%: Astute Analytica
NEW DELHI, March 3, 2022 /PRNewswire/ -- The study undertaken by Astute Analytica foresees a growth in revenue of the Global Third-Party Logistics Market from US$ 1,032 Bn in 2021 to US$ 1,656.7 Bn by 2027. The market is registering a growth at a CAGR of 8.2% during the forecast period 2022-2027. 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.
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The growing impetus of the third-part logistics market is attributed to factors such as increase in trade activities due to globalization and rising focus of manufacturers and retailers on core competencies. Rise in globalization has aided in setting up a worldwide network of manufacturing activities. To maintain it efficiently, the demand of 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, 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.
Segmental Analysis
Roadways holds the highest share in the third-party logistics market
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.
DTM has the highest share in the market in terms of services
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.
Technological segment is the highest user segment in the market for third-party logistics
Technological segment is the highest end user segment of the third-party logistics market in 2021 and also 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. Due to this technology customers can order, process, and track freight shipments any time.
Asia Pacific dominates the Global Third-Party Logistics Market
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 increase in digitization in emerging countries such as India and China are key factors responsible for the growth of third-party logistics in Asia Pacific region. Furthermore, the growing trans-regional trade corridors and gateways are expected to create a huge opportunity for the 3PL providers.
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Impact of COVID-19
COVID-19 pandemic has affected supply chain operations globally. The crisis placed an unprecedented strain on transportation and logistics resources. The logistics networks have been disrupted due to the supply/demand imbalance and lack of capacity for the long-haul and last-mile fulfillment services. The limited staff and reduced working time have further limited the logistics activities. Road transportation was majorly affected by the health crisis. However, this situation is improving and the market is experiencing a growth in the post-pandemic period.
Competitive Insight
- 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 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 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 to 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 includes 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 includes 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 Part Logistics Market:
- By Mode of Transport segment of the Global Third party Logistics Market is sub-segmented into:
- Railway
- 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
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