February 21, 2024
Third Party Logistics Market

Third Party Logistics Market Witnesses High Growth due to Increased Outsourcing by Manufacturers

The third party logistics market has witnessed significant growth over the past decade owing to the outsourcing of transportation and logistics activities by various manufacturing companies. Third party logistics service providers offer advantages such as specialized logistics services, cost-effectiveness, flexibility, and scalability. They help manufacturing organizations focus on their core competencies by taking up logistics activities.

The Global Third Party Logistics Market is estimated to be valued at US$ 1.63 Bn in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2030.

Key Takeaways

Key players operating in the third party logistics market are Johnson Controls, Solberg, Dr. Sthamer, National Foam, Eau&Feu, Dafo Fomtec AB, ICL Performance Products, KV Fire Chemicals, Auxquimia & Angus Fire.

The market provides opportunities for 3PL service providers in terms of value-added services and cross-border activities. Increasing demand from e-commerce sector and adoption of industry 4.0 technologies will also drive growth.

Globalization has led to the expansion of 3PL operations across regions. Major players are focusing on emerging markets through mergers and acquisitions to capture future growth opportunities.

Market drivers

The growing trend of outsourcing non-core logistics operations by manufacturing companies is a key factor driving The Third Party Logistics Market. Use of advanced technologies by 3PL providers such as IoT, AI and blockchain to improve supply chain efficiencies is further fueling market growth. Rising international trade and evolving customer demand have increased complexities in supply chain and logistics networks, propelling the demand for specialized third party services.

PEST Analysis

Political: Regulations around safety and transportation of logistics have some impact. Customs procedures at borders can slow cross-border movement.

Economic: Economic growth and demand increase transportation needs. Recession impacts demand for shipping and warehousing services. Fuel prices influence transportation costs.

Social: E-commerce growth increases parcel volumes requiring logistics. Younger customers prefer efficient delivery options. Sustainability concerns around packaging and vehicle emissions.

Technological: Digitization of documentation streamlines processes. Fleet management technologies optimize routes. Automation and robotics improve warehouse productivity but may reduce some jobs.

Geographical concentration

North America accounts for the largest share in value terms due to rapid e-commerce adoption and strong domestic consumption. Europe follows led by Germany, UK and France. Asia Pacific grows rapidly led by China due to expanding manufacturing and domestic markets.

Fastest growing region

Asia Pacific is forecast to be the fastest growing region due to the ongoing economic rise of major markets like China and India. Manufacturing shifts to Asia boost transportation needs within and outside the region. Rising affluence increases consumption and e-commerce adoption supporting logistics demand.