3PL market to reach US$925B by 2020

Increased convergence on core competencies by outsourcing secondary business activities such as logistics is expected to drive the 3PL market over the forecast period.


3PL C.H. Robinson DCC FedEx Grand View Research Kuehne Nagel UPS


The global 3PL market is forecast to reach US$925.31 billion by 2020, according to a new study by Grand View Research Inc. Increased convergence on core competencies by outsourcing secondary business activities such as logistics is expected to drive the 3PL market over the forecast period.

Infeasibility in managing geographically dispersed supply chain operations as a result of increased globalisation has led to several companies outsourcing their logistics function. Emerging trends such as Big Data and availability of industry-tailored 3PL services are expected to drive the market over the forecast period. Lack of internal control for addressing logistical challenges has led to increased outsourcing by wholesalers and retailers thereby providing a fillip to the 3PL industry.

DCC is expected to be a fast growing segment of the trucking and distribution industry with several prominent retailers such as Wal-Mart Target and Kroger catering to the service in order to increase truck capacity and reduce costs. DTM which involves value-added transportation management services and freight brokerage is expected to grow consistently throughout the forecast period. Refrigerated grocery and pharmaceutical applications are expected to emerge as the major growth areas for value-added warehousing services.

Asia-Pacific accounted for over 30 per cent of the market share in 2013 which can be primarily attributed to a surge in warehousing and distribution facilities in China, India, Indonesia, Singapore and Thailand. The North American 3PL market is expected to witness high growth throughout the forecast period, owing to gradually reducing labor and transportation costs in the US and Mexico coupled with technological advancements in logistics software in the US. The Eurozone crisis has considerably dampened Europe’s transportation and logistics industry which has a direct bearing on the regional 3PL industry, the report said. Automotive and life science industries are expected to lead the rejuvenation of the European 3PL market.