The Third Party Logistics Market is estimated to be valued at US$ 1.41 Mn in 2023 and is expected to exhibit a CAGR of 8.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Third party logistics involves outsourcing activities associated with supply chain management such as transportation, warehousing, freight and forwarding, inventory management and cross-docking to specialized service providers called third-party logistics providers or 3PLs. Increasing globalization and trade have led companies to focus on their core competencies rather than logistics activities. This has created growth opportunities for 3PL service providers.
Market key trends:
One of the key trends driving growth of the third party logistics market is the rise of e-commerce and the need for e-commerce fulfillment. The E-commerce industry has grown exponentially in the last few years with changing shopping habits of customers and higher internet penetration globally. This has led to a surge in demand for warehousing, transportation and cross-border delivery services from 3PL companies. Third party logistics providers offer complete e-commerce fulfillment solutions including order management, warehousing, pick and pack, shipment tracking and reverse logistics to online retailers. Their expertise in supply chain management helps e-commerce companies focus on their core business of selling online while outsourcing logistics activities. This is expected to further support the demand for 3PL services.
Porter’s Analysis
Threat of new entrants: Low barriers to entry may increase competition in the third party logistics market. However, existing players have stronghold due to established clientele and infrastructure.
Bargaining power of buyers: Large supply chain companies and manufacturers hold strong bargaining power due to the significant volume of outsourced logistics operations.
Bargaining power of suppliers: Third party logistics providers have adequate supplier options for transportation and warehousing services.
Threat of new substitutes: Low threat due to limited substitutes and entrenched consumer preference for comprehensive logistics solutions.
Competitive rivalry: Intense rivalry exists between established third party logistics providers to win and retain large clients.
SWOT Analysis
Strength: Integrated logistics services and global reach of major players. Economies of scale in transportation and warehousing.
Weakness: Heavy reliance on outsourcing activities of manufacturing industries. Rising operating costs can squeeze profit margins.
Opportunity: Growth of e-commerce will drive demand for delivery, distribution, and reverse logistics. Expanding into new geographies and industries.
Threats: Disruptions from emerging technologies in transportation. Vulnerable to economic slowdowns impacting manufacturing and trade volumes.
Key Takeaways
The global Third Party Logistics Market Growth is expected to witness high growth, exhibiting CAGR of 8.8% over the forecast period, due to increasing international trade volumes. North America and Europe dominate the third party logistics market currently due to large outsourcing of supply chain activities. The Asia Pacific region is expected to grow the fastest owing to rapidly developing economies and infrastructure.
Regional analysis: North America and Europe dominate the third party logistics market with large outsourcing presence of major manufacturing industries. However, the APAC region is anticipated to offer lucrative growth opportunities with a CAGR of over 10% between 2023-2030. China, India and Southeast Asia will drive the rapid expansion of the logistics industry in Asia.
Key players analysis: Key players operating in the third party logistics market incorporate DSV, a.p. moller - maersk, United Parcel Service of America, Inc., XPO Logistics Inc., DHL International GmbH, Kuehne+Nagel Inc., Geodis, FedEx Corporation, C.H. Robinson Worldwide, Inc., db schenker. The top players account for over 60% of the global market share due to integrated service offerings and large geographic presence.
For more insights, read- https://www.pressreleasebulletin.com/party-logistics-market-trends-size-and-share-analysis/
