Analysis of Third Party Logistics market covering 30 + countries including analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more
The global third-party logistics market size is estimated at US$ 1,031 Billion in 2022 and US$ 2,144 Billion by 2032 while exhibiting a growth rate of 7.6% during the forecast period.
The growing popularity of e-commerce and the advent of smart technologies are the key factors propelling the market growth in the assessment period.
Estimated Market Value in 2022
USD 1,031 Billion
Estimated Market Value in 2032
USD 2,144 Billion
Projected CAGR from 2022 to 2032
Top Companies Analysis
The global third-party logistics market was valued at US$ 955 Billion in 2021. Rising demand for efficient transport and storage systems in the wake of burgeoning domestic and foreign trade, as well as rising industrial activity, have pushed up demand for third party logistics during the historical period. A CAGR of 6% was registered by Fact.MR from 2015 to 2021.
Growth prospects were adversely impacted in 2020, during the peak of the COVID-19 pandemic crisis. Sudden contractions in industrial activity brought about by the imposition of a global lockdown led to cessation of outsourcing logistical activity to third party providers. However, as time passed, prospects began to rebound, initially in the healthcare industry owing to the growing demand for essential medicines, vaccines and other accessories to treat infected patients.
The growing focus on outsourcing logistics activities is expected to significantly contribute to propelling the market revenue during the forecast period. The market is anticipated to gain a market value of US$ 2,144 Billion in 2032, expanding at a CAGR of 7.6% during the analysis period. The growing focus of retailers and manufacturers on subcontracting activities like logistics is expected to act as a significant escalator of market expansion.
Improving Global Economy due to Rapid Globalization to Pump the Industry Expansion
Trade has increased significantly due to expanding globalization. Further, the dynamic conditions are expected to accelerate the growth of the industry. Due to the dynamism of the market, manufacturers find it challenging to keep a track of these activities, which is why 3PL are gaining prominence in the current time period. Besides, the advancement of the overseas market is likely to propel the industry notably.
Furthermore, the complexities in international documentation customs rules & regulations demand efficiency to handle the supply chain activity, therefore, SMEs leverage 3PL services, which provides a significant boost to the market. Moreover, the rapid expansion of e-commerce has changed the market dynamics, enhancing the importance of 3PL, and bolstering the market size during the forecast period.
Lack of Control of Manufacturers on Logistics Service Hinder the Market Expansion
A manufacturing company is dependent on 3PL services for competency, which results in a lack of direct control. Further, the inability of manufacturers to monitor operations at the warehouse can bring a negative impact on the quality of products.
Also, the lack of control of manufacturers on logistics is another factor impeding the market expansion during the forecast period. In addition, delays in customs clearance, disruption of transportation due to boundary closure during COVID-19 lockdown are other salient causes hampering the rise of the market in the coming time.
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APAC to Expand at a CAGR of 10% during the Forecast Period
Estimations at Fact MR reveal that the APAC region is the fastest-growing market. The projected growth rate is 10% during the forecast period. The rapid development going in the field of logistics infrastructure and the growing emphasis on transportation practices in developing countries is anticipated to propel the market in the region.
For instance, the National Highways Authority of India (NHAI) has taken various initiatives for the development of highways. In another instance, the Vietnam government proposed Vietnam Sea Transport Development Plan, an idea to enhance maritime freight transportation.
The U.S to make the most significant contribution to developing the Market
North America is anticipated to account for the largest market share in 2022, accumulating 40% of the total share. The U.S is likely to make the most significant contribution in developing the industry. The growing demand for cold storage is likely to be a salient factor augmenting the market in the region.
Furthermore, the presence of key players acts as a potential boost to the industry in the region. Some of the known players of the region are Expeditors International of Washington, Inc., C.H. Robinson Worldwide (CHRW) Inc., and UPS Supply Chain Solutions Inc.
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Domestic Transportation Management to have procured the Largest Market Share in 2022
As per Fact.MR, the Domestic Transportation Management (DTM) is anticipated to have procured about 32% of the market share in 2022. The increasing consumer demand in the retail, and healthcare sector is likely to act as a significant factor propelling the market growth during the forecast period.
Furthermore, the expansion of global economic activities and the rising popularity of e-commerce are other salient causes propelling the growth of the segment. On the other hand, with the growing Free Trade Agreements (FTAs), trade liberalization policies, and cross-border logistics, the international transportation services are likely to show considerable growth in the forthcoming period.
Manufacturing Sectors of India, China, Mexico, and the US to Experience a rise in Outsourced Logistics Activities
According to Fact. MR, the manufacturing segment is estimated to have acquired more than 24% of the revenue share in 2022. The manufacturing sectors in the US, Mexico, China, and India are likely to witness a notable rise in outsourced logistics activities, thereby boosting the market.
The manufacturing sector is outsourcing the logistics activities due to the benefits offered such as; business process development, enhanced customer services, chain visibility, and reduced transportation cost, bolstering the market growth. The growth of local manufacturing sectors is another salient cause developing the industry. For instance, the ‘Make in India’ project has provided a significant opportunity for expansion to the market.
The players of the global third-party logistics market adopt various strategies to expand their global reach. Methods such as acquisition, partnership, and collaborations are the most adopted strategies by the players to secure the forefront position in the market.
Some of the recent developments among the key players are:
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As per Fact.MR, third party logistics market demand is forecast to flourish at a CAGR of 7.6% until 2032
In North America, third party logistics is expected to account for 40% of the global revenue
According to Fact.MR, third party logistics will likely expand at a CAGR of 10% across the Asia Pacific
Domestic transportation management is expected to remain dominant, accumulating 32% revenue
Third party logistics for manufacturing is likely to account for 24% of the global market
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