Preliminary research of Fairfield Market Research indicates a promising growth outlook for global third-party logistics market during the course of next few years.
Increasing Trading Activity, and Rising Focus of Companies on their Core Competencies to Accelerate Third-party Logistics Market Growth
Stable improvement in the global economy coupled with dynamic market conditions are underlying factors driving globalization. This has resulted in an increase in activities related to trade across different industrial sectors. In this backdrop, the need for effective tracking of shipments and trade related activities has become imperative as companies focus on their core competencies. Providers of third-party logistics have been utilizing this opportunity by providing logistics support and associated services. Moreover, being a vital option for price sensitive customers, 3PL has gained significant traction in the past few years. Also, they carry out efficient management of supply chain activities, which has been driving the demand, thus influencing the third-party logistics market growth.
Complexities in Supply Chain Call for Efficient and Cost Effective Third-party Logistics
Evolution in the supply chain and a customer centric approach has resulted in companies adopting outsourcing model for supply chain activities. Logistics outsourcing has become an inevitable part of the corporate strategy in large number of organizations. The scope for such services has been expanding significantly, in turn complementing the growth of the third-party logistics market. Furthermore, volatility in international documentation procedures, complexities in customs rules and regulations have triggered the need for providers who have the experience and expertise in handling complex supply chain activities and associated legalities. That said, small and medium sized organizations are also leveraging third-party logistics (3PL) services for their business operations. Also, 3PL service providers are shifting towards just-in-time delivery from long haul delivery. Such transitions in this space are expected to bode well for the third-party logistics market in the long run.
Development and Adoption of New Technologies to Augur Well for the Third-party Logistics Market
Technology has been a boon for several industries and plays a crucial role in driving the operational efficiency of several business processes. Logistics sector being no exception is largely dependent on new age technology. Technology has played a vital role for service providers and shippers. Shippers are highly dependent on third-party logistics service providers for their operations. They rely on the expertise in supply chain event management, international trade logistics systems, warehousing management systems, and transportation management systems. Furthermore, service providers of third-party logistics can obtain these technologies, or software tools to integrate them in regular operations to achieve high productivity. These technologies can facilitate significant cost savings. For instance, companies can benefit from huge cost-cuttings by leveraging supply chain management, transportation management systems, cloud ERP and other automated systems. In addition, web-based transportation systems and warehouse management systems can help third-party logistics companies to touch base small and medium sized customers. For instance, to serve a broad range of customers, Schneider Logistics adopts a web-based SUMIT system alongside achieving cost effectiveness. Such developments in 3PL technologies have reduced complexities in operations, and this remains a crucial factor in driving the growth of the third-party logistics market.
Rise in E-commerce Sector to Provide Impetus to the Third-party Logistics Market
Albeit a major slack during the COVID-19 pandemic, the e-commerce business gained high momentum post lockdown restrictions. By end of 2020, the e-commerce sector witnessed a significant upswing owing to rise in customer demand for convenience and timely delivery. In addition, owing to the pandemic situations, customers preferred to order goods online instead of physically visiting stores, which in turn influenced the growth of the e-commerce sector. This has driven the demand for third-party logistics on the global front in turn providing new opportunities for service providers of 3PL. Moreover, to remain competitive and satisfy customer demands, e-commerce retailers are investing in outsourcing mission critical components and logistics operations to third-party logistics service providers. Furthermore, it becomes challenging for small scale e-commerce provides to establish in-house logistics from an investment standpoint. That said, they are leveraging 3PL services to carry out their individual activities, which is expected to bolster the growth of the third-party logistics market.
Asia Pacific Likely to Prevail as a Major Revenue Pocket for Third-party Logistics Market
Developing nations in the Asia Pacific region are poised to hold a significant share in the third-party logistics market. This can be attributed towards increasing trading activities in the region and strong technology proliferation. In addition, the region is considered as a manufacturing hub attractive several industrial majors. Companies involved in manufacturing and distribution of products across various industries have been tapping the Asia Pacific region owing to its geographical and macroeconomic benefit. Rising customer pool backed by bullish growth in the population in countries such as China, and India coupled with favourable business environment has fuelled the growth of the e-commerce sector in the region, in turn complementing the growth of the third-party logistics market in Asia Pacific. Furthermore, improvement in the logistics infrastructure and rise in transportation practices remain instrumental in bolstering the growth of the Asia Pacific third-party logistics market.
Third-party Logistics Market: Competitive Landscape
A few of the major players in the third-party logistics market include BDP International, XPO Logistics Inc., Burris Logistics, DHL Group, Ceva Logistics, UPS, Nippon Express, and Kuehne + Nagel Inc.
The Global Third-party Logistics Market is Segmented as Below:
By Service
By Transport
By End Use Industry
By Region
Key Elements Included In The Study: Global Third-party Logistics Market
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Considering the volatility of business today, traditional approaches to strategizing a game plan can be unfruitful if not detrimental. True ambiguity is no way to determine a forecast. A myriad of predetermined factors must be accounted for such as the degree of risk involved, the magnitude of circumstances, as well as conditions or consequences that are not known or unpredictable. To circumvent binary views that cast uncertainty, the application of market research intelligence to strategically posture, move, and enable actionable outcomes is necessary.
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