The 3PL (Third-Party Logistics) market is growing fast, changing how businesses handle warehousing and fulfillment. Knowing the 3PL market can give you a significant advantage whether you’re a business owner or a decision-maker.
This guide aims to provide insights into the 3PL market size, both on a global scale and US scale. Understanding the market size and its influencing factors can help businesses make smarter, more informed decisions. So, let’s dive in!
What is 3PL Market Size?
The phrase “3PL market size” describes the overall worth or extent of the Third-Party Logistics industry. This figure is often given as the yearly revenue the industry generates. However, it’s not just about the money involved; the measurement also shows how far-reaching the industry is, influencing areas like retail, e-commerce, and manufacturing.
What Influences 3PL Market Size?
Several factors influence the size and growth of the Third-Party Logistics (3PL) market, including:
- E-commerce Growth: The burgeoning e-commerce sector significantly influences the 3PL market. As e-commerce businesses expand, they often outsource logistics and distribution activities to 3PL providers to efficiently manage inventory, deliveries, and returns, which in turn boosts the 3PL market size.
- Technological Advancements: New technologies enable more efficient operations and improved service offerings in the 3PL warehouse sector, thereby attracting more businesses to opt for 3PL services.
- Increasing Demand for Quick and Flexible Delivery Services: The rising demand for quicker and more flexible delivery services, primarily driven by e-commerce growth, significantly enhances the 3PL market size.
- Reduction in Shipping Rates: Declines in shipping rates in various parts of the world promote the use of 3PL services as they become more cost-effective.
- Foreign Direct Investment (FDI): The inflow of FDI, particularly in emerging economies, stimulates the retail sector and, in turn, the 3PL market, as more retail businesses require logistics services.
How Large is the Global 3PL Market?
The global 3PL market size in 2023 is estimated to be around USD 1.22 trillion and is expected to grow to USD 1.59 trillion by 2028 at a Compound Annual Growth Rate of 5.48% during the forecast period of 2023-2028. 3PL companies in the US are projected to reach a size of USD 2.293 trillion by 2030, registering a CAGR of 10.7% from 2023 to 2030.
How Does 3PL Market Size Differ Globally?
The size of the 3PL (Third Party Logistics) market varies significantly across different regions globally due to several factors:
- Market Maturity: The United States has a substantial 3PL market estimated at USD 222.1 billion in 2021, holding a 24.68% global market share. By 2023, it’s projected to grow to USD 230.41 billion and USD 272.02 billion by 2028, with a Compound Annual Growth Rate (CAGR) of 3.38%. In Europe, the 3PL market size is forecasted to reach USD 194 billion, growing at a CAGR of 3% during 2018-2022.
- Growth Prospects: The Asia Pacific region is expected to register the fastest growth in the 3PL market from 2022 to 2030, driven by improvements in transport infrastructure and effective transit of freight and goods among emerging countries in this region.
What are the Current Trends Shaping the 3PL Market?
- Diversifying Services: 3PL providers are diversifying their services to introduce new revenue streams and meet the broadening logistics needs of their customers, acting more like 4PLs (Fourth-Party Logistics providers) by offering storage, freight, handling services, and more.
- Automation and Efficiency: 3PLs are working towards automating manual tasks like rate calculations, invoicing, and ordering to save time and build efficiency across their operations.
- Track-ability: The ability to track shipments in transit, view stock levels, and receive electronic proofs of delivery (ePODs) is becoming crucial as it provides usable data for all supply chain members.
How Can Businesses Use 3PL Market Insights for Strategy?
Businesses can leverage 3PL market insights in several ways to inform their strategies:
- Data Intelligence and Market Insights: Data intelligence and market insights from 3PL trends can enable smarter supply chain decisions. Businesses of varying sizes can benefit from these insights to enhance their supply chain strategies.
- Product Line Management: 3PL data analytics can assist businesses in making informed decisions regarding their product lines, such as when to discontinue a product or ramp up production based on sales trends.
- Asset Utilization: Conducting a 3PL market analysis can help ascertain the most profitable and strategic use of business assets. For instance, in one case study, a 3PL company engaged consulting services to determine the optimal use of its warehouses and land assets for strategic growth.
Adapting to the Changing 3PL Landscape!
The 3PL market is evolving with shifts in consumer habits, e-commerce growth, and global trade dynamics. You need a good partner to help you through these changes. At Warehousing and Fulfillment, we help you find the best 3PL services that fit your business’s needs today. We’ve been around since 2005 and know how to connect you with trusted companies. You get to pick the best deal for you.
Make your business better at dealing with these changes by working with us. Simply fill out our quote request form today. This is your first step to making your business work smoother and better.
FAQS about 3PL Market Size
Which is the Largest Market for 3PL Services?
The largest market for 3PL (Third-Party Logistics) services in 2023 is projected to be the United States, with revenues reaching around US$280.40 billion. However, the Asia Pacific region also shows substantial market size in the logistics sector, with significant growth driven by trade between India and China.
What is 3PL Worldwide Revenue?
The worldwide revenue for 3PL services in 2023 is projected to reach approximately US$1.22 trillion.
Which is the Fastest Growing Logistics Market in the World?
The fastest-growing logistics market in the world is driven predominantly by the Asia Pacific region. India’s E-commerce Logistics Market shows substantial growth, projected at a CAGR (Compound Annual Growth Rate) of 14.81% up to 2027 due to increased smartphone usage and AI advancements.
