The global Third Party Logistics Market is expected to reach USD 925.31 billion by 2020, according to a new study by Grand View Research, Inc. Increased convergence on core competencies by outsourcing secondary business activities such as logistics is expected to drive the 3PL market over the forecast period
Infeasibility in managing geographically dispersed supply chain operations as a result of increased globalization has led to several companies outsourcing their logistics function. Emerging trends such as Big Data and availability of industry-tailored 3PL services are expected to drive the market over the forecast period. Lack of internal control for addressing logistical challenges has led to increased outsourcing by wholesalers and retailers, thereby providing a fillip to the 3PL industry.
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Further key findings from the study suggest:
- DCC is expected to be a fast growing segment of the trucking and distribution industry, with several prominent retailers such as Wal-Mart, Target, and Kroger catering to the service in order to increase truck capacity and reduce costs. DTM, which involves value-added transportation management services and freight brokerage, is expected to grow consistently throughout the forecast period. Refrigerated grocery and pharmaceutical applications are expected to emerge as the major growth areas for value-added warehousing services.
- Asia Pacific accounted for over 30% of the market share in 2013, which can be primarily attributed to a surge in warehousing and distribution facilities in China, India, Indonesia, Singapore, and Thailand. The North American 3PL market is expected to witness high growth throughout the forecast period owing to gradually reducing labor and transportation costs in the U.S. and Mexico coupled with technological advancements in logistics software in the U.S. The Eurozone crisis has considerably dampened Europe’s transportation and logistics industry which has a direct bearing on the regional 3PL industry. Automotive and life science industries are expected to lead the rejuvenation of the European 3PL market.
- The 3PL market is moderately fragmented due to a blend of new entrants and established players. Due to several reasons ranging from overpriced companies & negative acquisition experiences to economic uncertainties & lack of attractive targets, the merger and acquisition (M&A) activity in the industry has considerably dampened. Continuous evolution and development of latest IT & automation systems for enhancing material tracking, value addition, flexibility, and security is expected to emerge as a key differentiating parameter of judgment while selecting a logistics partner.
- Logistics providers have laid emphasis on deploying cloud-based solutions to harness real-time data accessibility for reducing their IT and overhead costs. Leading players such as FedEx and Kuehne + Nagel have continuously worked towards incorporation of new features in their transportation management systems to enhance their supply chain operations. Other prominent 3PL vendors include C.H. Robinson Worldwide, DHL, J.B. Hunt, and UPS Supply Chain Solutions.
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About Grand View Research
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, the company offers market intelligence studies ensuring relevant and fact-based research across a range of industries including technology, chemicals, materials, healthcare and energy.
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