The global 3PL market is estimated to reach more than USD 1. 7 trillion by 2025, registering a CAGR of more than 8% over the forecast period, 2020 – 2025. The factors driving the growth are the increasing outsourcing of major transportation and logistics services and growing e-commerce penetration whereas the loss of control over the shipping functions is a major restraint to the market.
New York, Feb. 26, 2021 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “Global Third-party Logistics (3PL) Market – Growth, Trends, COVID-19 Impact, and Forecasts (2020 – 2025)” – https://www.reportlinker.com/p06028496/?utm_source=GNW
Shippers are continuing to leverage what 3PLs offer, allowing them to optimize the supply chain, minimize costs and create value, and align expectations as a key to achieving success for both parties. The high-end technology integration by 3PLs, industry expertise and cost reduction are some of the reasons, owing to which, the outsourcing of services is increasing. This outsourcing of services clearly indicates that the demand for 3PLs is on a rise and is driving the market.
Mobile technology is revolutionizing 3PL. Many 3PL companies have already begun to use mobile devices and apps to improve agility. Devices fitted with radio frequency identification (RFID) chips are not only capable of transmitting their location, but they also have the potential to hold data about themselves, so that they can be instantly tracked and identified. Using mobile apps installed on their mobile phone, customers will be able to order, process, and track freight shipments at any time.
Key Market Trends
E-Commerce Driving the Growth of the Market
The rapid growth of e-commerce is driving the demand for 3pl services across the globe. The unrelenting growth of e-commerce is fundamentally changing the third-party logistics (3PL) landscape. With the increasing consumer expectations for on-time and accurate deliveries and in order to stay competitive, more e-commerce retailers are outsourcing mission-critical components of their distribution and fulfillment operations to 3PL partners.
Many of the e-commerce retailers are small in size and cannot afford to have in-house logistic services. Therefore, services such as supply chain management, warehousing, consolidation service, and order fulfillment are outsourced to 3PL companies. However, the major e-commerce retailers such as Amazon and Alibaba are developing their own logistics infrastructure.
Meanwhile, the growth of e-commerce and change of consumer expectation is also presenting challenges to the 3PL companies in terms of reducing the parcel delivery times, increasing efficiency, adoption of latest and advanced technologies, etc. A huge transformation is taking place in the last-mile delivery, with companies looking at alternatives, such as delivery lockers, pickup points, crowdsourced deliveries, drone deliveries, and autonomous vehicles. The evolution of technology is reshaping the entire supply chain and reinventing the parcel industry. Technology is becoming a crucial enabler in increasing efficiency and reaching consumer expectations.
Asia Pacific Leads the Global 3PL Market
Asia Pacific region is the largest 3PL market in the world and is also the fastest-growing region. The 3PL market in the region is estimated to be more than USD 435 billion in 2019 and is expected to grow at a CAGR of more than 10% during the forecast period. China leads the 3PL market in the region with more than 60% market share. Southeast Asia region is the emerging hotspot in the Asia Pacific with fast-growing economies and increasing e-commerce penetration. India is also one of the key markets which is expected to grow strongly over the forecast period.
The market is highly competitive and fragmented with several large companies strategically forming alliances with mid-sized or small-sized companies to leverage their regional capabilities in logistics. Major regional players have been observed to venture into new regions, allowing the companies to improve their geographic reach. New competitors are entering the 3PL market with customized and industry-specific services.
Some of the major players include Agility, CEVA Logistics, DB Schenker, and DHL, among others. The 3PL players have been showing the willingness to partner with other players to reduce cost and leverage on mutual competitive advantage. Hence, the market observes a high volume of partnerships, mergers, and acquisitions. The Asia-Pacific region has a high concentration of new and emerging players. Major regional players have been observed to venture into new regions, allowing the companies to improve their geographic reach.
The global 3PL market players are also observing a shift in technology with the development of artificial intelligence, Internet of Things (IoT), and Blockchain, among others. The introduction and implementation of these new technologies have further intensified the market competition. Additionally, the technology adoption also helped reduce operational costs and improved efficiency.
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