Third-Party Logistics (3PL) Market to Grow at CAGR of 6.51% through 2028 – Growing Trend of E-Commerce Companies & Advent of Internet Services
Cloud-based platform, transportation management system and the use of RFID for monitoring the proper tracking of the shipment is playing the key role in third-party logistics (3PL) market. Also, the growing infrastructure in the developed and developing countries are helping in the expansion of third party logistics market.
Newark, Oct. 19, 2023 (GLOBE NEWSWIRE) — The Brainy Insights estimates that the USD 943.50 billion in 2020 global third-party logistics market will reach USD 1554.70 billion in 2028. The company outsources a portion of its distribution, warehouse, and other logistical functions to third parties. Generally, a third-party logistics company handles warehousing, transportation, and the supply of raw materials. To concentrate on their main business skills, companies outsource their logistics to third-party logistics providers. As the logistics business would take care of the products during shipment, this might also result in savings in capital expenditure and mitigate transportation risk. The third-party logistics business is being driven by rising awareness of the value of effective inventory management and more organised capital usage. Third-party logistics handles lean inventory management, quick deliveries, and shorter product lifecycle. The development of third-party logistics technology, such as cloud-based platforms, transportation management systems, and the use of RFID to track shipments properly, is playing a critical role in improving the service provided by the logistics company.
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Key Insight of the Global Third-party Logistics Market
Asia Pacific will dominate the market during the forecast period.
This results from the expanding manufacturing sectors in the region’s developing nations like China and India. Additionally, the retail industry has expanded due to increased disposable income. The increase in per capita income has also altered the way of life of the populace; as a result, they now have more needs, can afford higher-quality goods, and are more technologically aware. As a result, the region’s e-commerce sectors have expanded, which drives the third-party logistics business.
The International Transportation Management (ITM) segment had the highest market share of 42.13% in 2020.
The service segment is divided into Dedicated Contract Carriage (DCC)/Freight forwarding, Domestic Transportation Management (DTM), International Transportation Management (ITM), Warehousing & Distribution (W&D) and Value Added Logistics Services (VALs). The International Transportation Management (ITM) segment had the highest market share of 42.13% in 2020.
The roadways segment accounted for 42.36% of the market share in 2020.
The transport segment includes roadways, railways, waterways and airways. The roadways segment accounted for 42.36% of the market share in 2020.
The manufacturing segment accounted for 38.14% of market share in 2020.
The end-user segment comprises manufacturing, retail, healthcare, automotive and others. The manufacturing segment accounted for 38.14% of market share in 2020.
Advancement in market
Third-party logistics (3PL) factory complete automation is a Nimble initiative. The business has already started running its fulfilment facilities for third parties. Intelligent robotic fulfilment systems will pick, pack, and dispatch e-commerce orders on their own while minimising the size of the warehouse by up to 75%. In one to two days, Nimble’s network of robotic warehouses will give brands coverage of 96%+ of the U.S. population and click-to-collect savings of up to 40% against traditional 3PL suppliers. Autonomous systems are widely used, which is to Nimble’s advantage. The corporation is increasing the number of warehouses in a planned, methodical manner. Working with a wide variety of different company sizes is the ultimate objective.
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Driver: consumers’ high expectations and the widespread use of internet services.
Consumer expectations have grown. The shipment needs to arrive as soon as possible. Additionally, the product lifecycle is short in some of the deliveries. The goods that need to be shipped are frequently delicate. These demands for quick service, reliable transportation, and appropriate warehousing propel the third-party logistics market. The trend of e-commerce businesses requiring proper logistics services has expanded with internet services. Additionally, with internet services, the logistics process has become more transparent; one can now trace a product’s shipment. All of these factors are driving the third-party logistics sector.
Restrains: The absence of infrastructure.
The third-party logistics market is growing due to both developed and emerging nations’ expanding infrastructure. However, there are still a lot of locations with poor infrastructure, including unorganised waterways, roads, and air services, which can lead to missing shipments, delivered goods that have been tampered with, and delayed product delivery. These factors hurt the logistics industry. The market is being constrained by the lack of infrastructure and all the regulations the logistics company must abide by.
Opportunities: Technology advancements.
Technological advancements in third-party logistics, such as cloud-based platforms, transportation management systems, and the use of RFID to monitor the appropriate tracking of the package, are essential to improving the service provided by the logistics business. This may also be regarded as distinguishing one logistics firm from another. The growth of IoT-based services and the advent of automation in logistics are boosting the third-party logistics market. The rise in customer expectations and quick urbanisation drive the third-party logistics sector. The third-party logistics market is developing due to expanding e-commerce and internet service penetration.
Challenges: High capital outlay.
Third-party logistics management requires several resources and staff members who are experienced. Additionally, significant capital investments are needed for the specialised services to handle the storage, warehousing, shipping, distribution and delivery. The market’s expansion may be hampered by the high-cost outlay for setting up and operating third-party logistics.
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Some of the major players operating in the global third-party logistics market are:
• C.H. Robinson Worldwide, Inc.,
• DB Schenker
• DHL INTERNATIONAL GMBH,
• NIPPON EXPRESS,
• BDP International
• Burris Logistics
• Ozburn-Hessey Logistics, LLC.
• KUEHNE + NAGEL
• UPS Supply Chain Solutions Inc
Key Segments covered in the market:
• Dedicated Contract Carriage (DCC)/Freight forwarding
• Domestic Transportation Management (DTM)
• International Transportation Management (ITM)
• Warehousing & Distribution (W&D)
• Value Added Logistics Services (VALs)
• North America (U.S., Canada, Mexico)
• Europe (Germany, France, the UK, Italy, Spain, Rest of Europe)
• Asia-Pacific (China, Japan, India, Rest of APAC)
• South America (Brazil and the Rest of South America)
• The Middle East and Africa (UAE, South Africa, Rest of MEA)
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About the report:
The market is analyzed based on value (USD Billion). All the segments have been analyzed on a worldwide, regional, and country basis. The study includes the analysis of more than 30 countries for each part. The report analyses driving factors, opportunities, restraints, and challenges to gain critical market insight. The study includes Porter’s five forces model, attractiveness analysis, Product analysis, supply and demand analysis, competitor position grid analysis, distribution, and marketing channels analysis.
About The Brainy Insights:
The Brainy Insights is a market research company, aimed at providing actionable insights through data analytics to companies to improve their business acumen. We have a robust forecasting and estimation model to meet the clients’ objectives of high-quality output within a short span of time. We provide both customized (clients’ specific) and syndicate reports. Our repository of syndicate reports is diverse across all the categories and sub-categories across domains. Our customized solutions are tailored to meet the clients’ requirement whether they are looking to expand or planning to launch a new product in the global market.
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