The global third-party logistics (3PL) market was valued at $1.1 trillion in 2022, and is estimated to reach more than $2.3 trillion by 2031, according to a research report by India-based analytics and advisory company, Astute Analytica, drawing on its research database.
The report, titled “Global Third-Party Logistics Market Report, By Mode of Transport; By Service; By End-User; By Region; Segment Forecast, 2023-2031,” predicts the market will grow at a CAGR of 8.7% during the forecast period 2023-2031, largely driven by the increased demand for integrated supply chain solutions and services as businesses strive to become more efficient and cost-effective.
The third-party logistics market is expected to experience steady growth in the near future, as companies continue to realize the value of outsourcing their supply chain operations. This is evidenced by the adoption of advanced technologies such as AI and blockchain, which are being widely used to improve the efficiency and cost-effectiveness of 3PL operations, the report’s authors say. Companies are also increasingly investing in digital solutions such as warehouse management systems, fleet management systems and order management systems, which are enabling them to better track their shipments and optimize their supply chain operations.
The top six trends in the global 3PL market identified by the report are:
• Increased automation
• Increased adoption of data analytics
• Sustainable practices
• Cloud computing
• Artificial intelligence (AI)
These are just some of the trends that are shaping the third-party logistics market in 2022 and beyond. As the industry continues to evolve, businesses should stay informed about the latest developments to ensure that they are leveraging the best 3PL services available.
Roadways to Bring in over 44% Revenue of the Global 3PL Market
The report also finds that roadways are playing an increasingly important role in the 3PL industry. Companies such as DHL, Kuehne + Nagel, and XPO Logistics are leading the way in the adoption of roadways for 3PL services. With the use of dedicated contract carriage services and airways mode of transport, the roadways segment is expected to account for over 44% of the total revenue by 2031.
Domestic Transportation Management to Capture More Than 36% Revenue Share in Global 3PL Market
Domestic transportation management is expected to capture over 36% of the global 3PL revenue share in the coming years. This includes planning, scheduling, tracking, and monitoring shipments from the point of origin to the destination. It also involves managing other logistics processes such as warehousing, inventory management, and order fulfillment.
Further, the report finds, the emergence of autonomous vehicles and drones has made it possible to transport goods more efficiently, which has also increased the adoption of domestic transportation management services.
This, coupled with government initiatives to improve the transportation infrastructure across various countries, is expected to drive the growth of the global third-party logistics market during the forecast period.
The Top Five 3PL Players Hold Less than 23% Market Share
The global 3PL market is highly competitive, with a large number of players operating in the market. The competition in the market is primarily driven by factors such as price, quality of service, innovation, and customer service. Key players in the market are continuously striving to enhance their market position by implementing various strategies, such as expanding their global presence, entering into strategic partnerships, and investing in research and development activities.
Some of the leading players in the global third-party logistics market include DHL International GmbH, Kuehne+Nagel Inc., DB Schenker, Nippon Express, and FedEx Corporation. In 2022, these top five players held over 22% market share.
In addition, the market also has a significant number of regional and local players that operate in specific regions or countries. These players have a strong regional presence and are well-positioned to cater to the needs of local customers.
Overall, the report says, the global third-party logistics market is intensely competitive, with players constantly vying for market share and seeking to establish themselves as the leading player in the market.
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