Third Party Logistics Market is expected to reach US$ 1329.4 Million by 2027

Third Party Logistics market was valued at US$ 899.4 Million in 2019 and is projected to reach US$ 1329.4 Million by 2027; it is expected to grow at a CAGR of 7.4% from 2020 to 2027.

The global Third-Party Logistics Market accounted for US$ 805.4 billion in 2017 and is anticipated to be worth US$ 1,240.0 billion by 2025 to rise at an annual growth rate of 5.6% from 2018 to 2025. The rising demand for reducing overall operational cost and focusing on managing timely deliveries, efforts by the manufacturers to reduce assets and emphasize on core business, and benefits of managing seasonal variation of products are the potential aspects assisting the market expansion.

Logistics is the core area of third-party logistics (3PL) firms. These firms keep their IT systems updated to deliver the logistics services on time. The 3PL systems also help reduce inventory cost, delivery cost, and overall shipping cost of the company. Hence, the core companies outsource their logistics functions to third-party services to save on time and money, offer timely deliveries, streamline transportation, and maintain warehouses.

Based on transport mode, the market is divided into roadways, railways, waterways, and airways. The roadways segment held 39.9% market share in 2017. It was evaluated at US$ 321.1 billion in 2017 and is estimated to generate US$ 485.5 billion by 2025 to expand at 5.4% CAGR during 2018–2025.

Key players dominating the global third-party logistics market are Deutsche Post AG; Kuehne + Nagel International AG; Nippon Express Co., Ltd; DB Schenker (Deutsche Bahn AG); C.H. Robinson Worldwide, Inc.; DSV A/S; Xpo Logistics, Inc.; Sinotrans Co., Ltd; Geodis; and UPS Supply Chain Solutions (United Parcel Service, Inc.), among others.

As per services, the third-party logistics market sphere is divided into international transportation, warehousing, domestic transportation, inventory management, and others. With 28.4% market share, the others segment led the domain. It was valued at US$ 228.5 billion in 2017 and is speculated to garner US$ 336.5 billion by 2025 to grow at 5.0% CAGR during the forecast period.

The third party logistics market is segmented into mode of transport, services, end user, and geography. Asia Pacific held the largest share of the third party logistics market, followed by Europe and North America, in 2019. Based on mode of transport, the third party logistics market is segmented into roadways, railways, waterways, and airways.

The roadways mode of transport segment led the third party logistics market in 2019.In road transport, the vehicles are owned and managed by a third party and the transportation operations are adhered to licensing, insurance, and regulation of vehicles. The vehicle also requires documentation pertaining to maximum permissible weight in terms of gross vehicle weight and payload. In third party logistics, roadways are considered one of the feasible alternative as it ensures rapid and cost-effective transportation. However, roadways transport system is weather sensitive. 

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