Third Party Logistics (3PL) Market will be growing at 5% CAGR till 2024 | Hexa Research
Third party logistics providers are courier companies, freight providers and other companies offering subcontracted logistics and transport services.
The third party logistics (3PL) market is expected to grow at a CAGR of over 5 % during the forecast period (from 2016 to 2024). Rising focus on core business activities along with reduced shipping costs is expected to spur the growth of the global market. The introduction of e-commerce coupled with entrepreneurial ventures is also said to augment the demands for supply chain execution capabilities as well as specialized logistics. Various factors such as the emphasis on price and risk containment are said to hinder the market growth. In addition to this, sluggish economic growth and inconsistent freight volumes are also likely to hamper the overall market growth over the coming years. The global market is segregated as services and regions.
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The services sector involves dedicated contract carriage, domestic transportation management, software, international transportation management, and warehousing & distribution. The International Transportation Management (ITM) sector led the global market in 2014 and is expected to witness reach USD 340 billion by 2024. It includes goods brokerage and value-added transport management services. The Warehousing & Distribution (W&D) sector occupied for more than 23 % of the total market share in 2014. Other sectors including refrigerated grocery coupled with pharma applications are likely to witness the maximum growth prospects for value-added warehousing services in the near future.
Geographically, the Asia-Pacific third party logistics (3PL) market dominated the global market in 2014. The regional market is projected to reach USD 390 billion by 2024 growing at a healthy CAGR of over 6 % from 2015 to 2024. The European 3PL market is anticipated to reach USD 212 billion by 2024 growing at a CAGR of over 3 % during the estimated years.
The North American regional market is said to reach USD 270 billion by 2024. The region is expected to witness lucrative growth opportunities on account of steadily decreasing transportation charges and labor costs in the United States as well as Mexico. In addition to this, rapid improvement in technology logistics software is said to boost the growth of the market across the region in the next few years.
The major players in the third party logistics (3PL) market are Expeditors International; UPS Supply Chain Solutions; and Kuehne + Nagel International AG.
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