Delhi NCR, Dec. 17, 2021 (GLOBE NEWSWIRE) — The global third-party logistics (3PL) market is growing at a high CAGR due to the growth of e-commerce industry, growing trade activities, and increasing seaborne trades. Read on to learn more about the latest trends and growth drivers in the market…
A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the global third-party logistics market was worth USD 957.3 billion in 2020. The market is estimated to grow at a CAGR of 7.9%, earning revenue of around USD 1,573.8 billion by the end of 2027. Third-party logistics market growth has been driven by several factors, including the increasing demand for effective inventory management and enhanced working capital, booming e-commerce, growing globalization, and trade activities, as well as the increase in seaborne trades.
Growing E-commerce industry is Driving the Global Third-Party Logistics Market
The term e-commerce refers to the activity of buying and selling goods online. The internet has provided people with a platform to legally buy and sell anything via e-commerce platforms. The United Nations Conference on Trade and Development (UNCATD) reports that e-commerce sales were worth USD 25.6 trillion in 2018 with the US, Japan, and China accounting for the top three e-commerce markets worldwide. The e-commerce sector registered an enormous increase of 44%, almost tripling the 15% increase registered in 2019.
According to the International Air Transport Association (IATA), eCommerce accounted for 18% of total retail sales in 2020. The IATA also stated that air cargo represents about 35% of global trade. Furthermore, the International Post Corporation (IPC) reports that eCommerce grew by 141% from 2016 to 2020. Amid the growth of eCommerce, Air Canada and others are considering converting their passenger aircraft into freighters. Furthermore, Amazon purchased its first-ever Boeing 767-300 aircraft in 2021 to serve its customers. Amazon will acquire 11 aircraft in total as part of the deal in 2022. The company plans on using these aircraft to speed up the shipping of products to different corners of the world to meet consumer demand. Third-party logistics are expected to grow at a rapid rate during the forecast period due to the rapid growth of e-commerce.
Emergence of AI and Blockchain is expected to present lucrative opportunity for the growth of the global third-party logistics industry
Industry 4.0 has revolutionized the logistics industry with blockchain and artificial intelligence implementations. Amazon, DHL, FedEx, and others are using blockchain and AI not only to manage their inventories and streamline their supply chains, but also to reduce carbon emissions, cut operating costs, and increase security.
While some companies use either blockchain or AI, others have combined both technologies. Chronicled, for example, combines blockchain and artificial intelligence to provide its customers with better information about environmental conditions and transfer-of-custody processes. Likewise, ShipChain, a supply chain startup, has launched a blockchain-based platform to give real-time information on a container’s whereabouts, as well as estimated arrival times, via encrypted public ledgers. The growing penetration of blockchain and AI in the logistics industry is expected to create opportunities for the growth of the global third-party logistics market in the coming years.
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Global Third-Party Logistics Market – By Mode of Transport
Based on modes of transport, the global third party logistics market is grouped into railways, waterways, roadways and airways. Among these, the roadways transport mode dominated the global third party logistics market during forecast period of 2021-2027. The growing focus on developing a logistics network and forming public-private partnerships for highway construction is boosting the rise of 3PL services via road transport. Moreover, due to an increasing number of government programmes and investments designed to create road transport networks to boost freight forwarding, vendors are more willing to use modes of road transportation. On the other hand, the airways segment wull likely be the the fastest-growing segment during the forecast period.
Global Third-Party Logistics Market – Regional Insights
The report by BlueWeave Consulting analyzes the global third-party logistics market for five regions: North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa. Among these regions, the Asia Pacific region accounted for the maximum revenue share in 2020 and is expected to emerge as the fastest-growing regional market during the forecast period. An increasing number of trans-regional trade corridors and gateways will give 3PL providers more opportunities in the APAC region.
Additionally, the third party logistics market in the Asia-Pacific region will be fueled by the present administration’s new economic policies, along with improved rail, road, sea, and air infrastructure, and the mushrooming of logistics firms in the region focusing on technological advancements. Furthermore, increased investment in this industry from both traditional logistics and new e-commerce enterprises is projected to propel the market ahead. The forecast period is likely to witness continued investment in trains, bridges, and airways across the region’s emerging economies, which will boost warehousing and logistics demand, thereby driving the market forward.
Impact of COVID-19 on the Global Third-Party Logistics Market
During the COVID-19 pandemic and subsequent lockdown, the logistics industry was one of the hardest hit. Companies and countries were unable to conduct business as a result of the border closures, affecting the global economy. During the resumption of trade, the meteoric rise in demand for medical and healthcare supply derailed supply chains. Moreover, the shortage of labor, and the increasing cases of COVID-19, negatively affected the market for third-party logistics in 2020.
Logistics industry experienced a rollercoaster ride in 2020 as World Trade Organization (WTO) estimated that global trades declined by 9.2%. 2020. In addition, the WTO estimated a 7.2% increase in world trade in 2021; however, a severe second wave of COVID-19 and the ongoing issue of freight shortages have hindered this growth. In response to the freight shortage issue, freight costs have increased and are expected to remain high until 2023. Moreover, the freight issue is not expected to be resolved until the first half of 2022, halting the recovery of the third-party logistics market.
Global Third-Party Logistics Market -Competitive Landscape
The leading players in the global third-party logistics market are BNSF Railway Company, DHL International Gmbh (Deutsche Post Dhl Group), DB Schenker (DB Group), Kuehne+Nagel Inc., FedEx Corporation, Panalpina World Transport Ltd, MAERSK, United Parcel Service, Union Pacific Corporation, Yusen Logistic, Mahindra Logistics, and other prominent players. The market players compete with each-others in terms of products launches, integration of new technology, mergers & acquisitions, collaboration with other players and organizations. The companies operating in the third-party logistics market are looking to commercialize the technology as soon as possible to capture more market share.
In December 2021, CI Capital Partners announced the sale of Redwood Logistics, a leading third-party logistics provider to AEA Investors. Redwood Logistics offers a broad suite of services including transportation brokerage, managed transportation, and supply chain technology and related services.
In December 2021, Kenco Logstics, one the leading third-party logstics (3PL) proviers in North America was named a “Top Company for Women to Work For in Transportation” by the Women in Trucking Association (WIT) for the third consecutive year. One nominated, the winners are selected by nearly 15,000 transportation professionals in an industry-wide vote.
Scope of the Report:
|Years Considered||Historical data – 2017-2020
Base Year – 2020
Forecast – 2021 – 2027
|Facts Covered||Revenue in USD Billion|
|Market Coverage||United States, Canada, Germany, United Kingdom, France, Italy, Spain, China, India, Japan, South Korea, Brazil, Mexico, Argentina, Saudi Arabia, United Arab Emirates, South Africa.|
|Product/Service Segmentation||By Services, By Mode of Transport, By End-User and By Region|
|Key Players||Key market players include C.H. Robinson Worldwide, Inc., DB Schenker, FedEx Corporation, KUEHNE+NAGEL Inc., Maersk, DHL International GMBH, Nippon Express Panalpina World Transport Ltd., Union Pacific Railroad, and other prominent players.|
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the global third-party logistics market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the global third-party logistics market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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