Fifth-Party Logistics (5PL) Market

The Fifth-Party Logistics (5PL) Market is valued at USD 12.2 Bn in 2026 and is projected to reach USD 39.3 Bn,  growing at a CAGR of 18% by 2033.

Key Report Findings

• Technological advancements to play a crucial role in boosting 5PL service adoption
• End-use industries to boost market growth prospects for the fifth-party logistics market
• Demand for sustainable logistics solutions to fuel growth opportunities in 5PL industry
• Growing significance of real-time shipment tracking to elevate growth prospects
• Europe to make immense strides in regional prowess over the forecast period

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.

Growth Drivers

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.

Growth Challenges

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.

COVID-19 Impact

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 

• DHL Supply Chain & Global Forwarding
• Kuehne + Nagel
• DB Schenker
• C.H. Robinson
• XPO Logistics
• UPS Supply Chain Solutions
• FedEx Logistics
• GEODIS
• Penske Logistics
• CEVA Logistics
• Daimler Truck AG (digital freight / logistics initiatives)
• Amazon Logistics / Amazon Supply Chain
• Maersk (logistics & 5PL initiatives)
• Kerry Logistics Network
• Nippon Express

Recent Notable Developments:

• In November 2022, Amazon expanded its logistics services to third-party sellers, effectively becoming a 5PL service provider for its platform users
  
  
• In August 2022, UPS launched a new suite of 5PL services designed specifically for the healthcare industry. This would include transportation, warehousing, and regulatory compliance
  
  
• In March 2018, DHL, a logistics giant, announced its partnership with Accenture to create a blockchain-based supply chain prototype

Global Fifth-Party Logistics Market Segmentation is Listed Below:

By Type

• Transportation
• Warehousing
• Other service

By Application

• E-commerce
• Traders
• Logistics company
• Others

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa