Report Overview

Thriving e-commerce industry’s increasing demand for effective inventory management services, development of innovative technologies, rising working capital, and globalization are expected to drive United States Third Party Logistics Market at a significant growth rate during the forecast period (2018–2028).

United States Third Party Logistics Market size was estimated to reach a value of USD 226.7 billion in 2021. The market size is also expected to reach USD 362.8 billion by 2028, recording its growth at a CAGR of 6.9% during the forecast period (2018–2028). The significant growth in United States Third Party Logistics Market is expected to be driven by the well-established international network of manufacturing operations, and an increasing need for third-party logistic (3PL) services due its efficient maintenance. In addition, the range of 3PL services will broaden further during the period in analysis, as supply chain productivity advantages in terms of cost and dependability can be obtained with the aid of managerial and IT know-how offered by 3PL enterprises. The expansion of United States Third Party Logistics Market is also to be fueled by the growth of the e-commerce sector and increasing reverse logistic activities.

Third-Party Logistics - Overview

A manufacturer uses the 3PL function to outsource logistics and distribution-related tasks. A 3PL business can offer specialized services including product packing, cross-docking, inventory management, and door-to-door delivery. The rise of the e-commerce sector is expected to lead to a significant increase in the market for 3PL services. The demand for 3PL services is also projected to rise shortly, because of manufacturers and merchants concentrating more on their core strengths and outsourcing less specialized tasks, such as logistics. Due to increased rivalry, manufacturers are now promoting their various production and distribution expertise by focusing on their core areas.

United States Third Party Logistics Market Forecast and Trends

Growth Drivers

Globalization-related Growth in Trading Activities

The two main forces propelling globalization are the dynamism of the market and the expansion of the world economy, including the United States. Due to the growth of globalization, various trade-related activities have been seen to increase. As it is difficult for manufacturers or merchants to effectively monitor these operations, 3PL businesses assist these manufacturers in doing so. This factor is expected to propel the United States Third Party Logistics Market growth. Additionally, the expansion of the U market is a key factor supporting the development of the 3PL sector. Customers, who are price-conscious and in a need for a greater selection of high-quality products with prompt delivery, are increasingly dependent on 3PL services. Hence, globalization induced increased trading activities promote the expansion of United States Third Party Logistics Market.

Expanding E-Commerce Industry

During Covid-19 pandemic, the E-commerce industry experienced significant changes in various locations. Customers' expectations regarding timely delivery have shifted. Customers choose same-day and next-day delivery options. As a result, several shops began to provide logistic services to match client expectations. Furthermore, the continued growth of e-commerce is expected to increase demand for logistic services, such as quick delivery and inventory management. In tier 3 and 5 cities where the demand for logistic services is high, the growth of 3PL service providers’ businesses will be accelerated. Furthermore, increased urbanization, deeper penetration of internet and smartphones, increasing number of warehouses, and expansion of the logistics industry are expected to fuel the growth of United States Third Party Logistics Market during the forecast period.

Manufacturers and Retailers’ Increasing Emphasis on Core Capabilities

In United States, there has been an increasing focus of manufacturers and merchants on their core businesses and subcontracting out tasks, such as logistics, where they lack expertise. Here, promoting specialized production and distribution is the main objective. By balancing the needs of various client shippers throughout the transportation and distribution operations, 3PL organizations can make greater use of transportation assets and achieve economies of scale. Supply chains get longer and more complex because of outsourcing and offshoring. Manufacturers find it incredibly challenging to manage this kind of supply chain, thus demand for 3PL service providers is forecast to rise in the period in analysis. The 3PL model offers improved asset utilization and asset sharing partnerships, which are driving demand 3PL services and United States Third Party Logistics Market.

Restraints

Risk to Manufacturers’ Reputation

One of the most important operations of manufacturing companies, including order fulfillment and management of customs and distribution, is managed by 3PL service providers. The manufacturers’ reputation and relationship with customers are likely to suffer because of 3PL service providers’ errors. When a 3PL service provider is unable to fulfill an order on schedule, the manufacturing company's reputation suffers, which lowers consumer confidence in the brand. Consequently, this could limit the expansion of United States Third Party Logistics Market.

Impact of COVID-19 on United States Third Party Logistics Market

COVID-19 pandemic had significant negative impact on several businesses in United States. To slow the pandemic's rapid spread, governments across the country enacted stringent lockdown regulations and social segregation standards. During the early phases of the epidemic, factories across the world were shut down. Additionally, the economic downturn that followed the pandemic may cause a large delay in the commercial launch of the IT sector. The backbone of technology providers, small and medium-sized businesses, saw a sharp decline in revenue since Covid-19 in 2020. As a result of the supply chain disruptions, market players faced several difficulties. However, as more supplies come online in the second half of 2023, trends are expected to get better.

United States Third Party Logistics Market - By Service

Based on the service, United States Third Party Logistics Market is segmented into Warehousing, International Transportation, Domestic Transportation, Inventory Management, and Others. Among these, domestic transportation accounts for the highest share in United States Third Party Logistics Market. The administration of domestic transportation involves the flow of goods between states in the same country. Businesses are also actively working to expand their reach in the local market. For instance, Yusen Logistics, a US-based logistics company, sold its domestic and international business to Transplace Inc. in October 2018. Transplace expects to benefit from an expanded domestic transportation industry, because of this acquisition.

United States Third Party Logistics Market – By Transport Mode

Based on transport mode, the United States Third Party Logistics Market is segmented into Airways, Railways, Roadways, and Waterways. Among these, the roadways segment holds the highest market share. Due to improved road infrastructure and an increase in cross-border trade between the country's landlocked regions, the necessity for roadways as a means of transportation in 3PL market has been seen to rise significantly. In addition, 3PL service providers use cutting-edge IT tools, such as WMS and transport management systems (TMS) to provide first-party businesses with creative delivery solutions. All these factors are expected boost the growth of United States Third Party Logistics Market during the forecast period.

United States Third Party Logistics Market - By End User

Based on end user, the United States Third Party Logistics Market is segmented into Automotive, Healthcare, Retail, Consumer Goods, and Others. The retail segment currently holds the highest market share and is expected to continue to be in the leadership position among end users during the forecast period. The retail industry involves the procurement of materials and other components from various resources located across the country. The involvement of several suppliers and distributors makes logistics a time-consuming task. As a result of the benefits offered in terms of lower transportation costs, supply chain visibility, inventory and vendor management, business process improvement, and improved customer services, the industrial sector is outsourcing logistical retail activities.

Competitive Landscape

Leading players in United States Third Party Logistics Market include A.N. Deringer Inc, AmeriCold Logistics, LLC, BDP International, Inc., Burris Logistics, C.H. Robinson, CEVAlogistics, CITI Solutions, DHLInternational GmbH, FedEx Corporation, Kuehne + Nagel Inc., Nippon Express Co. Ltd, PANTOS Co. Ltd, Schneider National, Inc., XPO Logistics, Yusen Logistics Co. Ltd., UPS, and JB Hunt.

The United States Third Party Logistics Market is highly fragmented with the presence of several companies in the country. The market leaders retain their supremacy by spending on research and development activities, incorporating cutting-edge technologies into their goods and services, and releasing upgraded items for customers. Various tactics, including strategic alliances, agreements, mergers, and partnerships, are used.

Recent Developments

• In June 2022, AmeriCold opened its new facility with 181,000 square feet of cold storage and operations space in Dunkirk, New York. The facility has 25,000 pallet positions.

• In August 2022, FedEx Office, a subsidiary of FedEx Corp., collaborated with Ford Pro for its pilot project of utilizing 10 Ford E-Transit vans across its FedEx SameDay City network.

Scope of the Report

By Service

• • Warehousing

  • International Transportation

  • Domestic Transportation

  • Inventory Management

  • Others

By Transport Mode

• • Airways

  • Railways

  • Roadways

  • Waterways

By End User

• • Automotive

  • Healthcare

  • Retail

  • Consumer Goods

  • Others