Third Party Logistics Market is Expected to Reach 1.24 Trillion USD by 2025
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The global Third Party Logistics (3PL) market is expected to reach USD 1.24 trillion by 2025, according to a new report by Grand View Research, Inc. The increasing outsourced-logistics functions availed by middle market companies to address their logistics challenges, are expected to positively impact the industry growth.
The domestic and global markets for outsourced-logistics services are continuously evolving toward advanced services and cloud-based technologies. The diligence related to logistics costs has led to an increased focus on the key concerns such as supply chain sustainability and security. Lowering of inventory costs is becoming a norm in the automotive and retail sectors, which is providing ample growth opportunities for 3PL providers.
Third party logistics providers are strengthening their relationships with freight providers to optimize their supply chain capabilities. They are also investing in contemporary IT solutions, commercial offerings, cloud-based solutions, and proprietary innovations to create a leading-edge approach. Though the economic conditions are varying across countries, significant improvements are visible in the key regions of Asia Pacific and North America.
3PL providers allow businesses to focus on their core activities such as R&D, manufacturing, and strategic planning, thereby relieving them from the daily burden of operational logistics issues. The key 3PL vendors use advanced applications and IT software, which enhance their distribution coverage and provide quality services to the customers. Omnichannel distribution has gained momentum in the past few years, primarily due to the increased penetration of e-commerce.
Further key findings from the report suggest:
- The value added logistics services segment is expected to be the fastest-growing segment, owing to the increasing need for inventory management and improved cycle times
- The retail sector is expected to grow at a CAGR of over 7.5%; this growth can be attributed to the evolution of omni channel retailing and the need for data-driven analytics solution to manage fleet and warehousing
- Airways are expected to witness the fastest growth over the forecast period as consumers are willing to pay a premium price to receive products at the earliest
- The Middle East 3PL market is expected to reach a revenue share of over 8.5% by 2025, due to the increase in imports and exports and an upward trend in local manufacturing
- The key industry players include DHL, FedEx Corporation, C.H. Robinson Worldwide, UPS Supply Chain Solutions, and Kuehne + Nagel International AG
- Several organizations are transitioning toward 3PL vendors to deliver enhanced transportation management services for increased visibility and predictability
Read the full report here.
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