Global fifth-party logistics market is likely to exhibit a promising growth curve as far as the short-term outlook is considered. The report will uncover the insights into how the market growth will unfold in the next few years.
Key Report Findings
Market Analysis in Brief
Third-party logistics service providers have been prevalent across industries for more than a decade now. Adoption of 3PL among small and mid-sized businesses besides large companies has been constantly on the rise since then. While 5PL is an infant segment of logistics industry, it holds the promise to cover the widest range of end users with its capabilities of managing the entire supply chain networks. The vendors in fifth-party logistics market are predominantly eying businesses in the proliferating e-Commerce industry. The industry is more likely to demonstrate impressive growth across Europe, and the key markets of Asia, and North America.
Increasing Complexity of Supply Chains Across Industries
The global supply chain is becoming increasingly complex, with various logistics service providers involved in managing various aspects of the supply chain. 5PL service providers allow for the streamlining and managing of these complex logistics operations, offering a single point of contact for logistics management. Moreover, various advancements in technology, such as IoT, cloud computing, and big data analytics, continue to make it easier to manage and track the movement of goods across multiple channels. This is another element that is expected to have a major impact on the growth trajectory of the global fifth-party logistics market.
Growing Demand for Real-time Tracking, Visibility, and Sustainable Logistics
The need to optimize the supply chain process and to reduce operational costs, as well as the growing demand for real-time tracking and visibility of shipments to boost customer loyalty and satisfaction are major elements that are expected to play a vital role in fueling growth prospects for the various players engaged in the fifth-party logistics market. Additionally, the demand for sustainable logistics practices, including the improving of supply chain transparency and reducing of carbon emissions are expected to augment market growth opportunities as 5PL providers can aid companies in achieving these goals by managing their logistics operations in a more transparent and sustainable way.
Lack of Technological Awareness, and High Implementation Costs
Fifth-party logistics is still relatively new, with many companies not being aware of the benefits associated with using a 5PL provider. This could potentially limit further growth of this global market as many companies may resort to managing their logistics operations in-house or by working with multiple logistics service providers. Additionally, the implementation of 5PL solutions may be costly, specifically for smaller-sized businesses with limited resources. These businesses may need to invest in newer technology and systems to integrate with the 5PL provider. These factors may lower the adoption rates of 5PL solutions, thus hindering the further progression of players in the global fifth-party logistics market.
The onset of the COVID-19 pandemic resulted in the imposing of restrictions by respective governments on the movement of people and goods, as well as the hampered supply of necessary raw materials, among other operational hurdles. This led to a significant decline in generated revenues for many industries and this was no different for the global fifth-party logistics market. However, as restrictions were gradually relaxed, post the 3rd and 4th waves, the global fifth-party logistics industry regressed to its pre-COVID state of projected operations. Nonetheless, the onset of this pandemic had accelerated the adoption of fifth-party logistics solutions as companies looked for ways to improve their supply chain resilience and adapt to changing market conditions or scenarios.
Growth Opportunities Across Regions
Asia Pacific to Grow Lucrative, Europe to Surge Ahead
Owing to the rapidly increasing demand for efficient logistics operations, as well as the implementation of ongoing technological advancements such as AI, and machine learning, the Asia Pacific region is slated to register the fastest CAGR in the fifth-party logistics market over the forecast period. This region is followed by North America. However, it is projected that the market for fifth-party logistics in Europe is expected to account for one-third of this global market in the coming years.
Fifth-Party Logistics Market: Competitive Landscape
Major players in the fifth-party logistics market include 5PL Logistics Solutions, Bain & Company Inc., Boston Consulting Group (BCG), Deloitte, DHL International, Maine Pointe, McKinsey & Company, MGL Global Logistics, Renaissance Network Reinvent, and Toll Holdings Limited, to name a few. To gain a competitive edge, various established industry players are now more focused on new product launches, partnerships, collaborations, acquisitions, and alliances.
Recent Notable Developments:
Regional Classification of Global Fifth-Party Logistics Market is Listed Below:
Middle East and Africa
*Regions and countries are subject to change based on data availability.
Key Elements Included In The Study: Global Fifth-Party Logistics (5PL) Market
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