Third Party Logistics Market Size to Reach USD 2.43 Trillion by 2032 growing at 8.5% CAGR - Exclusive Report by Acumen Research and Consulting

Author: Acumen Research and Consulting

The Third Party Logistics Market, valued at USD 1.08 Trillion in 2023, is projected to surpass USD 2.43 Trillion by 2032, indicating a robust CAGR of 8.5%

Third party logistics (3PL) refers to the outsourcing of logistics and supply chain management functions to specialized service providers. These services can include transportation, warehousing, inventory management, order fulfillment, and shipment forwarding. By leveraging the expertise and resources of 3PL providers, businesses can focus on their core operations, reduce costs, and improve efficiency. 3PL companies often have advanced technology and extensive networks that enable better scalability and flexibility in handling logistics. They also help companies expand into new markets by managing international logistics and customs processes. Ultimately, 3PL services enhance overall supply chain performance and customer satisfaction. However, high initial investment costs for technology and infrastructure became a restraint for the third party logistics market. Furthermore, emerging markets presenting untapped potential for third-party logistics providers prompted the third party logistics market. For instance, in June 2023, Amazon India introduced its new and budget-friendly Amazon Prime Lite membership plan for customers in the country. As a consequence, market participants are looking into new advancements in the third party logistics market.

Third Party Logistics Market Trend

Third Party Logistics Market Statistics

  • The global third party logistics market, generating USD 1.08 trillion in 2023, projects a CAGR of 8.5% from 2024 to 2032
  • Asia-Pacific leads with a substantial 0.45 trillion of revenue in 2023
  • Asia-Pacific is expected to grow with a projected CAGR of 9.3%
  • Based on service, domestic transportation management (DTM) dominance, holds 35% of market share in 2023
  • Based on transport, roadways sub-segment accomplished 57% of share in 2023
  • A discernible trend in the third party logistics market trend is advanced technologies like AI, IOT, and blockchain are being increasingly integrated into 3pl operations to enhance efficiency, transparency, and real-time tracking

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Third Party Logistics Market Dynamics

Rising Focus on Cost Reduction and Operational Efficiency by Businesses Fuels the Third Party Logistics Market Value

The increasing emphasis on cost reduction and operational efficiency among businesses is significantly boosting the value of the third party logistics market. Companies are turning to 3PL providers to streamline their supply chain operations, reduce overhead costs, and leverage advanced logistics technologies. This shift allows businesses to focus on core activities while benefiting from the expertise and economies of scale offered by 3PL firms. As a result, the demand for comprehensive logistics solutions is growing, driving market expansion. Ultimately, the detection of enhanced operational efficiency and cost savings is propelling the 3PL industry forward.

Technological Advancements Such As AI and IoT Transforming Logistics Operations Offer Significant Third Party Logistics Market Opportunity

Technological advancements, particularly AI and IoT, are revolutionizing logistics operations by enhancing efficiency and transparency. AI-driven analytics optimize route planning and demand forecasting, reducing costs and improving delivery times. IoT devices provide real-time tracking of shipments and inventory, enabling better supply chain visibility and management. These innovations create substantial opportunities for 3PL providers to offer more sophisticated and value-added services. For instance, in December 2023, Yusen Logistics Co. Ltd. partnered with Pickle Robot Company to introduce Pickle Unload solutions at its Long Beach, California facility. This collaboration aims to reduce the physical workload of personnel and enhance service reliability, demonstrating Yusen's commitment to advanced robotics automation for superior client service. As a result, 3PL companies can leverage these technologies to differentiate themselves in a competitive market, driving growth and customer satisfaction.

Third Party Logistics Market Segmentation

The global market for third party logistics has been segmented into service, transport, end use, and region.

  • Service is classified into dedicated contract carriage (DCC)/freight forwarding, domestic transportation management (DTM), international transportation management (ITM), warehousing & distribution (W&D), and value-added logistics services
  • Transport are divided into roadways, railways, waterways, and airways
  • End use are categorized manufacturing, retail, healthcare, and automotive
  • The third party logistics market is geographically split into Europe, North America, Latin America, APAC, and the Middle East and Africa

Third Party Logistics Market Regional Outlook

In terms of third party logistics market analysis, Asia-Pacific dominates 3PL industry and also fastest-growing region in forecast year, driven by its extensive manufacturing base, robust e-commerce growth, and the presence of major logistics providers. For instance, in November 2022, Amazon started providing its transportation and logistics network as a service to third-party merchants, enterprises, and direct-to-consumer brands in India. This move replicates a model the e-commerce giant has been experimenting with in the United States for several months. Additionally, factors such as increasing cross-border trade, government initiatives to improve infrastructure and the rise of digital logistics solutions contribute to this dominance.

Meanwhile, North America is the fastest-growing region in the 3PL market, fueled by technological advancements, high consumer demand for efficient delivery services, acquisitions by key manufacturers, and the expansion of the retail and automotive sectors. For instance, on 28 November 2023, Kuehne+Nagel have announced the acquisition of Farrow, a prominent customs broker situated in Canada. This strategic initiative aligns with Kuehne+Nagel's goal to expanding its service range, particularly for firms that rely on customs clearing services. The acquisition is positioned to meet rising demand in a climate characterized by increasingly complex international trade restrictions. Moreover, the region's rapid growth is also supported by investments in smart logistics and automation technologies, enhancing supply chain efficiency and responsiveness.

Third Party Logistics Market Players

Third party logistics companies profiled in the report include Panalpina World Transport India Private Limited, C.H. Robinson, DB Schenker, Nippon Express, DHL Group, United Parcel Service, JB Hunt, Kuehne + Nagel International AG, Ceva Logistics, and FedEx Corporation.

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Mr. Frank Wilson

Acumen Research and Consulting

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