Third-party Logistics Market Growth & Trends
The global third-party logistics market size is expected to reach USD 1,691.86 billion by 2028, registering a CAGR of 8.5% from 2021 to 2028, according to a new report by Grand View Research, Inc. The advent of new technologies is changing the 3PL industry dynamics. The advanced data collection capabilities, warehouse automation, and digitalization of the entire supply chain are enabling companies to adopt a consistent innovative, customer-centric, and agile approach. As a result, 3PL companies are providing technologically driven services by investing in block-chain solutions, mobile technologies, and 3PL software to gain a competitive advantage in a fiercely competitive marketplace.
The Internet of Things (IoT) and cloud-based logistics management solution turn the data into actionable value-added information, which can shape the strategic decision-making process and increase productivity. Some of the capital-intensive organizations are increasing their Information Technology (IT) spending and are using predictive analytics for supply chain enhancement. For instance, C.H. Robinson Worldwide, Inc. is using Artificial Intelligence (AI) technology to analyze customer data and get notified about extreme weather conditions or traffic disruption.
Logistics automation is expected to play a vital role in the growth of the market. The use of robots in warehouses and unloading docks helps streamline order fulfillment services. The use of Automated Guided Vehicle (AGV) can help to lessen human errors, resolve material handling issues, ensure movement of high-volume goods, and increase accuracy and repeatability. To deliver immediate value and long-term returns, companies are widely accepting logistics automation.
The value-added logistics services are expected to witness the highest growth rate over the forecast period. The 3PL companies are offering comprehensive logistics services to ensure their competitiveness of the business. Shippers are reducing their operational costs by shifting their focus from transportation and back-office functions, such as warehousing, order taking & picking process, kitting & final assembly, product localization, and labeling. Thus, the value-added logistics services are becoming a boon for the shippers to mitigate inventory and transportation costs.
Third-party Logistics Market Highlights
- The market is anticipated to witness substantial growth during the forecast period due to the development of logistics infrastructure in the Asia and Middle East regions, growth of the global e-commerce sector, and the development of new technologies
- The value-added logistics services segment is expected to register the highest CAGR over the forecast period
- The market players are focusing on providing value-added services to unveil their unique capabilities and offer enhanced customer experience, facilitating the segment growth
- The retail end use segment is expected to register the highest CAGR over the forecast period owing to benefits offered by retail stores, such as same-day delivery
- The roadways segment held the largest share in 2020 owing to the growing public-private partnerships model and increased emphasis on logistics infrastructure
- Globalization, along with sustainable economic growth, is expected to drive the growth of the airways logistics mode over the forecast period
- Asia Pacific is anticipated to register the highest CAGR of over 10.0% from 2021 to 2028 owing to the growing transport infrastructure and effective transit of freight and goods in emerging countries