by Third party logistics involves outsourcing of logistics activities like transportation, warehousing, freight and forwarding, inventory management and non-core logistical functions to specialized service providers which enables businesses to focus on their core competencies. This reduces overhead costs and allows companies to scale their logistics operations according to need without making large capital investments in transport assets and warehouses.
The global Third Party Logistics Market is estimated to be valued at US$ 1.63 Mn in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
With rising global trade, complexities in supply chain management have increased considerably for businesses. Managing logistics functions in-house requires huge capital expenditure and specialized expertise which most companies lack. This has motivated them to outsource these activities to third party logistics providers who leverage economies of scale to offer services more cost effectively. They provide cost savings of up to 30% through optimized transportation and warehousing. This is a major factor prompting businesses across industries to rely on third party logistics providers for their logistical needs.
SWOT Analysis
Strength: The third party logistics market has strong expertise in supply chain management and logistics operations. Outsourcing non-core activities helps companies focus on their core competencies.
Weakness: Third party logistics providers have less control over inventories and transportation compared to in-house logistics. Security and data privacy are also potential issues that need to be addressed.
Opportunity: Growth of e-commerce and omnichannel retail is driving demand for sophisticated logistics and distribution services. Emerging technologies around warehouse automation and data analytics present new opportunities.
Threats: Economic slowdowns can negatively impact industrial production and consumer spending, reducing the demand for logistics services. Rising operational costs and fierce competition are constant challenges.
Key Takeaways
The Global Third Party Logistics Market Size is expected to witness high growth over the forecast period of 2024 to 2031. The market size is projected to grow from US$ 1.63 billion in 2024 to US$ 2.72 billion by 2031, registering a CAGR of 5.9%.
Regional analysis
North America currently dominates the third party logistics market, led by the large e-commerce and manufacturing sectors in the US and Canada. Asia Pacific is poised to be the fastest growing region, supported by rapid economic development, rising incomes, and growth in cross-border trade across India, China, Southeast Asia and Australia. Countries like China and India are emerging as global manufacturing hubs and logistics hotspots.
Key players
Key players operating in the third party logistics market are Johnson Controls (including ANSUL), Solberg (a division of Amerex Corporation), Dr. Sthamer, National Foam (a part of Kidde-Fenwal, Inc.), Eau&Feu, Dafo Fomtec AB, ICL Performance Products, KV Fire Chemicals, and Auxquimia & Angus Fire. These companies offer comprehensive third party logistics services including transportation, warehousing, cross-docking, inventory management, and packaging. They are making strategic investments in automated sorting systems and data analytics capabilities.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
