Global Third Party Logistics Market Growing Massively–Projected to Reach Worth USD 1,573.8 Billion By 2027
Published | 03 December 2021
The global third party logistics market is set to grow at a healthy pace. A number of opportunities for third-party logistics companies have arisen due to the growth of e-commerce and freight transportation, which in turn is driving the market’s growth…..
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 and is anticipated to reach the valuation of USD 1,573.8 Billion in 2027 at a CAGR of 7.9%. The factors leading to this impressive growth is attributed to various market dynamics, such as the increase in trading activities due to the increasing trend of globalization and the thriving the e-commerce industry, which has made recording keeping of trade activities difficult for manufacturers and distributors. Moreover, demand for effective inventory management and enhanced working capital is projected to increase reliance on Third party logistics providers during the forecast period.
Growth of e-commerce activity 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 buy and sell anything via e-commerce platforms legally. According to the United Nations Conference on Trade and Development (UNCATD), global e-commerce sales were worth USD 25.6 trillion in 2018, with the United States, Japan, and China being the three biggest e-commerce markets in the world. The e-commerce sector in the U.S. registered an enormous jump of 44%, almost tripling the 15% increase reported in 2019. With the growth of the e-commerce sector, the industry is witnessing the growing demand for quick shipping with minimum cost and timely delivery, which in turn is driving the the third-party logistics market.
The emergence of Blockchain and AI Driving the Market Forward
The implementation of blockchain and AI in the logistics industry under Industry 4.0 has revolutionized the global third party logistics market. Blockchain and artificial intelligence are being increasingly adopted by companies like Amazon, DHL, FedEx, and others to efficiently manage their inventories, improve security, streamline their supply chains and reduce carbon emissions, along with cutting operating and labor costs. While some businesses are utilizing either blockchain or artificial intelligence, others are combining the two to streamline their processes. For example, Chronicled, a blockchain-based supply chain solutions provider combines blockchain and AI to give its customers better insights into transfer-of-custody processes and environmental conditions. Global third-party logistics are expected to grow in the coming years as blockchain, and AI penetrates the logistics industry.
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The Healthcare Segment is Expected to Witness Healthy Growth in Upcoming years
Based on end-users, the global third-party logistics market is segmented into automotive, healthcare, retail, consumer goods and others. Among these, the consumer goods segment of the market accounted for the largest market share in 2020. However, the retail end-user segment is also catching up as retail logistics service providers have been entering the third party logistics industry with a technology-centric approach. As retailers look for data-driven solutions for predictive analytics, they are increasingly turning to third party logistics services, thereby driving the market’s growth. Likewise, the healthcare sector is also expected to grow at a highest rate during the forecast period of 2021-2027.
Impact of COVID-19 on the Global Third Party Logistics Market
Globally, the coronavirus outbreak has severely disrupted supply chain networks. The supply chain management industry faced many challenges because of the lockdowns, export/import restrictions, and travel restrictions. Moreover, the panic caused by the pandemic among people worldwide changed the demand pattern for many products. Therefore, the third-party service providers turned to robotic process automation and drone delivery to fulfil their services. The industry is still grappling with the effects of the pandemic and is taking measures to strengthen its supply chain network to prevent future problems.
Asia-Pacific Region Dominates the Market
The third party logistics market is categorized into North America, Europe, the Asia-Pacific, Latin America, and the Middle East & Africa. The Asia Pacific had the highest revenue share in 2020, and it is expected to grow at the fastest rate from 2021 to 2027. An important factor contributing to the expansion of the market in the region is the growing number of transregional trade corridors and gateways, which will present many opportunities for third party logistics companies. On the other hand, the North American region will also grow at a healthy CAGR during the forecast period due to the current administration's economic policies, enhanced rail, road, sea, and air infrastructure, and significant logistics enterprises that focus on technological advancements.
Global Third Party Logistics Market - Competitive Landscape
The third party logistics market is slightly competitive and highly fragmented due to the presence of various global and regional players. The key players dominating the market are C.H. Robinson Worldwide, Inc., DB Schenker, DHL International GMBH, FedEx Corporation, KUEHNE+NAGEL Inc., Maersk, Nippon Express, Panalpina World Transport Ltd., Union Pacific Railroad, United Parcel Service, and other prominent players.
The key marketing strategies adopted by the players are new launches, collaborations, and partnerships to expand their customer reach. For instance, in October 2021, PrestaShop, a worldwide player in e-commerce software and market leader in Europe and Latin America, announced a strategic alliance with Deutsche Post DHL Group, the world's biggest logistics company.
The report's in-depth analysis provides information about growth potential, upcoming trends, and global third party logistics market statistics. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in the global third party logistics market along with 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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