PUBLISHER: The Business Research Company | PRODUCT CODE: 1753867
PUBLISHER: The Business Research Company | PRODUCT CODE: 1753867
Third-party logistics (3PL) refers to the outsourcing of logistics and supply chain management functions to a specialized external service provider. These providers offer a range of services, including transportation, warehousing, inventory management, order fulfillment and distribution. 3PL providers act as intermediaries, bridging the gap between manufacturers, suppliers and end customers, facilitating the smooth flow of goods throughout the supply chain.
The third-party logistics (3PL) market consists of sales, by entities (organizations, sole traders and partnerships), of third-party logistics services that are used in logistics and supply-chain management to contract a company's shipping and fulfillment needs, which may involve warehousing, purchasing supplies, inventory control, customs brokerage, freight audit, payments and shipment monitoring.
The global third-party logistics (3PL) market was valued at $902,194.25 million in 2019 which grew till 2024 at a compound annual growth rate (CAGR) of more than 6.00%.
Rising Fuel Prices And Transportation Costs
The rising fuel prices and transportation costs drove the growth of the third-party logistics (3PL) market during the historic period. Fuel prices refer to the cost of gasoline, diesel, or other fuels used for transportation, while transportation costs encompass all expenses related to the movement of goods, including fuel, labor, maintenance and logistics. Rising fuel prices and transportation costs increase the financial pressure on businesses, challenging cost-effective logistics. To address this, many companies turn to third-party logistics (3PL) providers to enhance supply chain efficiency and reduce expenses. 3PL providers use economies of scale, advanced route optimization and strategic partnerships to control fuel costs while ensuring timely deliveries. By outsourcing logistics, businesses can focus on their core operations while benefiting from cost savings, greater flexibility and improved supply chain management. For instance, in August 2022, according to the Bureau of Transportation Statistics, a US-based government agency, the price of regular motor gasoline increased by 49% from January to June 2022, while the price of diesel fuel rose by a slightly higher 55%. Additionally, in August 2022, according to Statistics Canada, a Canada-based government agency, the cost of transporting intermodal shipping containers by rail increased by 28.4% in July 2022 compared to the previous year, marking the highest price rise among all Canadian freight rail services, which saw an average increase of 17.7%.Therefore, rising fuel prices and transportation costs drove the third-party logistics (3PL) market.
AI-Driven Order Allocation And Optimization For Enhanced Supply Chain Efficiency
Companies operating in the third-party logistics (3PL) market are focusing on developing advanced products, such as AI-driven order allocation and optimization, to enhance operational efficiency. Automated order allocation and optimization software is a system that uses algorithms and real-time data to efficiently assign and prioritize orders across warehouses, fulfillment centers and delivery networks to minimize costs and improve delivery speed. For instance, in December 2024, Logility, a US-based software company, launched Intelligent Order Response, an AI-native features that will revolutionize supply chain management. Intelligent Order Response is an AI-driven order allocation and optimization software that actively scans for and resolves demand-supply imbalances, enhancing the order fulfillment process. As part of Logility's Decision Intelligence Platform, this solution eliminates rigid allocation rules and manual processes, automatically and intelligently allocating available inventory to meet demand within specified business goals and timeframes. This AI-first approach optimizes business outcomes by reducing costly expedited logistics fees, minimizing supply chain fines and improving customer satisfaction while offering AI-powered recommendations for supply chain network adjustments through Logility's Continuous Network Optimization.
The global third-party logistics (3PL) market is fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 6.11% of the total market in 2023.
Third-Party Logistics (3PL) Global Market Opportunities And Strategies To 2034 from The Business Research Company provides the strategists; marketers and senior management with the critical information they need to assess the global third-party logistics (3PL) market as it emerges from the COVID-19 shut down.
Where is the largest and fastest-growing market for third-party logistics (3PL)? How does the market relate to the overall economy; demography and other similar markets? What forces will shape the market going forward? The third-party logistics (3PL) market global report from The Business Research Company answers all these questions and many more.
The report covers market characteristics; size and growth; segmentation; regional and country breakdowns; competitive landscape; market shares; trends and strategies for this market. It traces the market's history and forecasts market growth by geography. It places the market within the context of the wider third-party logistics (3PL) market; and compares it with other markets.