Third Party Logistics Market Forecast to 2027 - COVID-19 Impact and Global Analysis by Mode of Transport, Services, and End User ; and Geography
NEW YORK, Aug. 11, 2020 /PRNewswire/ -- The third party logistics market was valued at US$ 899.4 billion in 2019 and is projected to reach US$ 1,329.4 billion by 2027; it is expected to grow at a CAGR of 4.2% during the forecast period. Third party logistics (3PL) is a service provided by an outside company in order to perform the company's product distribution and materials management functions. 3PL are the companies delivering single or multiple logistics services to the manufacturing companies. Although 3PL firms do not hold the ownership of the product for distribution, they are bound to accomplish the requested logistics activities of the purchasing company. 3PL firm has become a significant part supply chain for small and large businesses. These firms provide services such as international and domestic transportation, inventory management, warehousing, distribution, order fulfillment, and freight consolidation. By outsourcing 3PL services, manufacturing companies are able to focus on product development, sales, and other core operations. 3PL offers immediate knowledge and expertise in the field, tracks on international logistics, and create cost savings.
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Increase in demand for shipping cost reduction and focus on timely delivery management, reduction on company's assets and permitting focus on core business, and advantage in managing seasonal variations are projected to drive the third party logistics market during the forecast period.However, lesser control of manufacturers on logistic service and delivery process may adversely impact the third party logistics market in near future.
Moreover, the factor such as growing e-commerce in retail sector is projected to generate remarkable growth opportunities for the industry players.
The global market for third party logistics has been segmented on the basis of mode of transport, services, end user, and customer.Based on mode of transport, the market is categorized into roadways, railways, waterways, airways, and others.
The roadways is the dominant segment owing to its rapid and cost-effective transportation.Based on services, the market is classified into international transportation, warehousing, domestic transportation, inventory management, and others.
Domestic transportation is the leading segment which is expected to grow at a CAGR of 3.3% during the forecast period from US$ 99.1 Billion in 2019 to US$ 136.0 Billion in 2027. Based on end user, the global market is segmented into automotive, healthcare, retail, consumer goods, and others. The retail segment dominated the market in 2019 with the market share of 22.0% and is expected to continue its dominance during the forecast period.
Impact of COVID-19 Pandemic on Third Party Logistics Market
The North America region especially the US witnessed an unprecedented rise in number of COVID-19n confirmed cases resulting in large-scale lockdown across the region.Moreover, the retailers and brands are facing various short-term challenges pertaining to the supply chain activities through retailers, distributors, and suppliers of third party logistics across North America.
As a result, countries such as the US and Canada limited the volume of logistics services.However, owing to the ease of lockdown restrictions along with emphasis towards effective restoration of food industry related supply chain operations has mitigated the negative influence of the COVID-19 over the market growth.
Further, the presence of domestic supplier has ensured the continuous demand of the third party logistics across the North American region.
The impact of COVID-19 varied from country to country across the European region as selected countries witnessed a surge in number of confirmed cases and subsequently attracted stringent regulations.Countries such as Italy, Russia, and Spain are facing a notable disruption of supply chain activities due to the prolonged lockdown imposed by the governments.
As a result, the closure of national borders and restricted movement of goods have affected the growth of the third party logistics market. Moreover, due to COVID-19 pandemic, a large number of small & medium enterprise owners faced financial difficulty owing to the limited movement or transportation of goods across the European region.
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