Logistics Services (3PL & 4PL) Market Size Projected to Generate a Revenue of $3,040 Mn by 2031Download Sample Reports Overview
The Global Logistics Services (3PL & 4PL) Market Share is predicted to be valued at $3,040 million by 2031, surging from $1,257.3 million in 2021, at a CAGR of 9.7%.
Impact Analysis of COVID-19 on the Logistics Services (3PL & 4PL) Market
The COVID-19 pandemic led to a decrease in industrial growth as a result of severe supply chain disruptions and stoppage of manufacturing operations. The pandemic majorly had a negative effect on some industries, including the automobile and retail industries, which hampered the expansion of the 3PL&4PL logistics industry. Trade restrictions and international border closures halted imports and exports, disrupting the entire industrial process. Supply chain disruptions, lockdown measures, and decrease in consumer and corporate spending impeded the industry growth. However, it is anticipated that demand for these logistics services would increase as governments of various countries across the globe have relaxed their severe regulations. On the other hand, during the pandemic, the demand for the food and beverage business as well as the e-commerce sector has experienced a great increase, supporting the expansion of the logistics services market in the food and beverages sector.
Global Logistics Services (3PL & 4PL) Market Analysis
The capacity to give enterprises the scalability and flexibility to use resources depending on current business demands is a key benefit of third-party and fourth-party logistics providers. In other words, working with a 3PL & 4PL firms makes it simpler to manage the high and low demand since they can assist in quickly adapting to variations in demand. Without taking on additional risk or work, they may also scale resources like transportation, manpower, or space based on inventory requirements. Working with a 3PL & 4PL also enables companies to expand without constraints into new 3pl &4pl geographic areas. A 3PL & 4PL logistical assistance and sector knowledge are advantageous to those seeking to grow in new locations, whether domestically or globally. This makes entry into a new logistics zone considerably seamless and minimizes costly delays and cycle times. These are the major factors anticipated to boost the logistics services (3pl & 4pl) market growth during the forecast timeframe.
The efficient operation of the supply chain may suffer due to a lack of cooperation between the shippers, transporters, and final consumers. It is a significant difficulty for 3PL and 4 PL organizations to sometimes be unable to satisfy the unique logistical requirements of the shippers. Typically, the shippers are dissatisfied with some of the services offered to them, including packing, timely delivery, and customer support. These factors are predicted to hamper the market growth.
A control on demand fluctuations is another service offered by third-party logistics, which is showing demand from the manufacturing industry to manage inventory and supply chain. When a firm lacks infrastructural facilities and only functions as a warehouse, the service providers also maintain superior warehouse management and assist the manufacturers in maintaining inventory supplies. Global demand for 3 PL & 4 PL and management networks is being further boosted by government efforts including trade agreements and treaties, as well as public-private partnerships. These factors are anticipated to generate investment opportunities during the forecast period.
Global Logistics Services (3PL & 4PL) Market, Segmentation
The global logistics services (3PL&4PL) market is segmented based on service type, application, and region.
The service type segment is further classified into transportation, warehousing, value added services, and others. Among these, the transportation sub-segment accounted for the highest logistics services (3PL & 4PL) market share in 2021. Outsourcing of transportation or logistics services is referred to as third- and fourth-party logistics. This can include any tasks connected to product shipment, storage, or delivery. A 3PL & 4PL does more than just book company's freight; it functions as an extension of your transportation department. Typically, a 3PL & 4PL provider adopts an embedded, strategic approach to managing a client company's transportation and supply chain. In rare circumstances, the 3PL & 4PL may be in charge of all transportation-related tasks for a client organization. Such benefits provided by logistics in transportation are anticipated to drive the growth of the segment.
The application segment is further classified into consumer electronics, healthcare, automotive, industrial, food and beverages, aerospace and defense, and others. Among these, the consumer electronics sub-segment accounted for the highest logistics services (3PL & 4PL) market share in 2021. The consumer electronics sector is both complicated and fiercely competitive. Consumer electronics have a limited lifespan, and the market is also pressured by quick changes in consumer demand. The number one reason many businesses fail is that they are unable to keep up with rapid technological advancements. Thus, 3PL and 4PL services are adopted and provide advantages in consumer electronics sector.
The logistics services (3PL & 4PL) market in Asia-Pacific is projected to witness the fastest growth. The regional market generated the highest revenue in 2021. Asia-Pacific is anticipated to dominate the logistics services (3PL & 4PL) market because of the region’s growing e-commerce presence. The market offers 3PL and 4PL services from top suppliers, including Nippon Express, Yusen Logistics, and APL Logistics. Asia-Pacific's growing e-commerce industry has increased the demand for logistic services, which has fueled the market expansion.
Key Players in the Global Logistics Services (3PL & 4PL) Market
Some of the leading logistics services (3PL & 4PL) market players are
- C.H. Robinson Worldwide Inc.
- DB Schenker
- FedEx Corporation
- 4PL Group
- Kuehne + Nagel International AG
- Orkestra SCS
- Phoenix Freight Systems