A third-party logistics (3PL) is a partner or service that helps manufacturers, particularly online retailers, outsource their distribution and logistical needs. Specialised services including inventory management, cross-docking, door-to-door delivery, and product packaging are offered by a third-party logistics company. In turn, this helps businesses improve customer satisfaction, guarantee scalability, reduce the danger of product damage, foster business growth and market expansion, and make it possible to finish essential business processes. Additionally, the 3PL business is growing as a result of the increased asset utilisation and asset sharing partnerships that the third-party logistics model offers. Third-party logistics is currently offered for sale in a variety of service categories and modes of transportation, such as domestic and international transportation management and dedicated contract carriage (DCC).
According to SPER Market Research, ‘Global 3PL Logistics Market Trends, Revenue, Share, Scope, Growth Drivers, CAGR Status, Challenges and Future Investment Opportunities Till 2032’ states that Global Third-Party Logistics Market is projected to be worth USD 2431.83 billion by 2032 and is expected to surge at a CAGR of 8.85%.
One of the main factors driving the expansion of the global third party logistics market is the shippers’ emphasis on cost-effectiveness and outsourcing logistics activities. Additionally, the need for effective inventory management services is fuelled by globalisation and rising working capital, both of which will help the target market expand. Additionally, the quickening pace of globalisation has facilitated the establishment of a global network of manufacturing operations and is fostering the expansion of the third-party logistics industry. The high rates of third-party logistics market adoption are also being aided by the reorganisation of brick and mortar business models. The market is growing as a result of the rise in manufacturing companies, better economic conditions, and more internet usage.
Market expansion is expected to be hampered by inadequate infrastructure, rising logistics costs, and a lack of producer control over logistical services. The lack of skilled logistics workers further limits the growth of the worldwide third-party logistics industry. Because different government agencies have different policies, logistics service providers need to use more management and administrative resources. As a result, regulatory discontinuity may slow the growth of the global logistics services sector. The harm of direct control over the logistical service, possible reputational harm, and the growing competition from in-house logistics operations as businesses seek greater autonomy and cost control will also be the biggest barriers to the growth of international third-party logistics.
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The global COVID-19 pandemic has had a significant impact on the third-party logistics (3PL) business. The epidemic has not only increased demand for logistics services but also caused disruptions to 3PL companies’ regular operations and introduced new challenges. The 3PL industry has been greatly impacted by the disruption of global supply chains brought on by COVID-19. Lockdowns, travel restrictions, and border closures have caused delays and capacity limitations in the logistics and transportation networks. Furthermore, last-mile delivery services and warehouse operations are under additional strain due to health issues and labour shortages. The pandemic’s spike in e-commerce also compelled 3PL companies to quickly adjust to increased volumes and changing client demands.
North America dominate the global third-party logistics market due to the increasing demand for cold storage. Some of the key players are – C.H. Robinson Worldwide, DB Schenker, DHL International GMBH, FedEx Corporation, KUEHNE+NAGEL Inc.
Third-Party Logistics Market Segmentation:
By Services: Based on the Services, Global Third-Party Logistics Market is segmented as; Dedicated Contract Carriage (DCC)/Freight forwarding, Domestic Transportation Management (DTM), International Transportation Management (ITM), Warehousing & Distribution (W&D), Value Added Logistics Services (VALs).
By Transportation: Based on the Transportation, Global Third-Party Logistics Market is segmented as; Roadways, Railways, Waterways.
By End User: Based on the End User, Global Third-Party Logistics Market is segmented as; Manufacturing, Retail, Healthcare, Automotive, Others.
By Region: The global third-party logistics market was divided into North America, Europe, Asia Pacific, South America, and Middle East & Africa based on geography.
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