Third Party Logistics (3PL) Market Size, Share, Trends and Growth, Analysis and Professional Survey Report 2016

Third Party Logistics (3PL) Market Analysis, Share and Size,
Emerging Trends, Overview and Outlook, Growth And Segment
Forecasts To 2022
Third Party Logistics (3PL) is the function by which a manufacturer outsources activities related to
logistics and distribution. Often a 3PL company can go beyond just logistics and distribution and can
provide specialized services such as inventory management, cross-docking, door to door delivery and
packaging of products. The market for this service is expected to witness growth at good pace owing to
its use in today’s competitive environment. Moreover, the demand is expected to rise due to increase in
the focus of manufacturer and retailers on their core business (known as core competencies) and
subcontracting activities, such as logistics where they have less expertise. Thus, the increase in the
competition has diverted the focus of manufacturer to promote respective specializations in production
and distribution.
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Increase in the globalization helped in setting up a worldwide network of manufacturing activities. To
maintain it efficiently, the demand of 3PL companies is expected to rise. The scope of 3PL services is
expected to increase as productivity gains in supply chain in terms of cost and reliability can be derived
with the help of managerial and information technology expertise provided by 3PL companies. Increase
in the e-commerce industry and reverse logistics operations are also driving the market of 3PL industry.
However, loss of direct control on the logistics service and potential loss of reputation are the most
critical factors, which are likely to restrict the growth of this market. The market of 3PL is still
fragmented, with plenty of room for growth. With number of orders increasing in small amount of time
the opportunity or challenge to the 3PL companies will be to meet the demand by completing more
orders at lower cost with the help of multi-channel distribution.
The report segments the 3PL market on the basis of mode of transport, service type and geography. On
the basis of mode of transport, the market is segmented into roadways, railways, airways and
waterways. On the basis of service type, the market is segmented into dedicated contract carriage
(DCC), domestic transportation management, International transportation management, warehousing
and distribution, others (IT services and logistics software). Geographical breakdown is done as North
America (U.S., Mexico and Canada), Europe (U.K., France, Germany, Italy and Rest of Europe), AsiaPacific (China, India, Japan, South Korea, Australia and Rest of Asia-Pacific) and LAMEA (Latin America,
Middle East and Africa)
Increasing in the trading activities globally due to globalization
Increase in the number of trading activities due to globalization. The major force driving this growth is
the growth of global economy and relaxation of trade barriers. Corporations across the world are
increasing manufacturing, sourcing, warehousing and distribution at global scale making their supply
chain complex for them to manage.
Increase in the focus of manufactures and retailers on core competencies
Increasing focus of retailers and manufacturers on their core business to promote the respective
specialisation in production and distribution is increasing sub contracting activities such as logistics.
Different countries policies and regulations differs
Awareness about rules and regulations of different countries is difficult to maintain. Therefore, 3PL
service providers having more awareness about policies and regulations make their work easy which
increases their efficiency.
Evolution of e-commerce industry
Increase in the technological advancement has led to the growth of e-commerce industry around the
globe. Many e-commerce service providers have expanded their services by integrating shipping service
with public and contract warehousing as well as freight management.
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Increase in Reverse logistics operations
Increase in demand for repairs, re-manufacturing, returns etc have increased over a period of time as a
result of which manufactures and retailers are not able to cope up effectively with reverse logistics.
Therefore, they outsource to 3PL service providers to effectively and efficiently provide this service.
Reduction in control on logistics service
Manufactures rely on core competencies, reliability and honesty of 3PL service providers and its staff.
Mode of communication between manufacturer and 3PL service provider remains through phone or email.
Risk in potential loss of reputation
As there is no direct control over the logistics service, it is difficult to keep check on service provider. Any
delay or damage from their side will create negative impact on customers about the manufacturer as
they have placed order with the manufactures, so they find that its sole responsibility of manufacturer
to deliver the quality order they placed.
Some of the key players in 3PL market at global stage are DHL, United Parcel Service, FedEx Corporation,
Damco, DB Schenker, Kuehne+Nagel Inc., NYK logistics, Panalpina World Transport Ltd., Union Pacific
Corporation and BNSF Railway Company
Key benefits of the study
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Comprehensive analysis of the current and the future trends in the global 3PL market have been
provided in this report
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Geographically the global market is analyzed based on various regions such as North America,
Europe, Asia-Pacific, and LAMEA
In depth analysis has been done in this report by constructing market estimations for the key
market segments from2014-2022
This report provides the quantitative analysis of the current market and estimations through
2014-2022, which assists in identifying the prevailing market opportunities
Porter’s five forces analysis is performed on 3PL services highlighting the factors which might
affect the present and future market of 3PL companies
Competitive intelligence of leading providers of 3PL services helps in understanding the
competitive scenario across the geographies.
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