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The US third-party logistics (3PL) market is estimated to grow by USD 120.1 billion at a CAGR of 8.08% between 2023 and 2028. The growth of the logistics market hinges on several pivotal factors, including the escalating trend of cross-border trade, reflecting the globalization of supply chains and expanding international commerce. Furthermore, the cost benefits associated with employing third-party logistics (3PL) providers drive companies to outsource their logistics operations, fostering efficiency and cost-effectiveness. Additionally, the rising adoption of multimodal transport, integrating various transportation modes seamlessly, addresses the complexities of modern supply chains and enhances operational flexibility. These factors collectively contribute to the expansion of the logistics industry, catering to the evolving needs of businesses in an interconnected global economy. As companies seek to optimize their supply chain operations and adapt to dynamic market demands, the logistics sector remains integral to facilitating the smooth and efficient movement of goods worldwide.
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The market is thriving, driven by the diverse needs of industries like aerospace, consumer and retail, and healthcare, which rely on 3PL providers for services such as domestic transportation management and international transportation management, value-added warehousing, and distribution. With the surge in ecommerce merchants increasingly partner with 3PL companies to handle their logistics needs, including last-mile delivery and omni-channel operations. These providers offer expertise in cross-docking and door-to-door delivery, leveraging advanced IT solutions and logistics infrastructure to streamline operations and enhance efficiency. As global trading activity intensifies, businesses, including small and medium-sized businesses, turn to 3PL providers for assistance with international documentation procedure, customs rules and regulations Small and medium-sized businesses Omni-channel operation Fourth-Party Logistics compliance, and navigating blockchain-enabled supply chains. In this dynamic landscape, 3PL companies play a pivotal role in enabling seamless logistics solutions for shippers across various industries, supporting the growth and success of businesses nationwide. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing use of multimodal transport is the key factor driving the growth of the market. Multimodal transport is the combination of two or more modes of transport, such as road, rail, air, or sea, for freight transport. Use a combination of trucks, rail cars, planes, and ships one after. By efficiently combining multiple modes of transport, you can reduce storage costs and lower the cost of goods. The use of multimodal transportation also helps businesses transport products efficiently and reduce outbound logistics transportation costs.
For instance, FedEx Corp. (FedEx) offers FedEx International Priority Freight, which is a transport solution for heavy auto parts consignments that weigh between 68 kg and 1,000 kg per item. The company uses multiple modes of transport, such as air or sea and rail or road, to ensure that the goods are transported to their destination safely. Similarly, PLS Logistics Services offers customized multimodal solutions for freight movement. Hence, the increasing use of multimodal transport will drive the growth of the market during the forecast period.
Growing demand for green logistics is one of the primary market trends. Increasing global warming is forcing suppliers in the market to adopt green logistics solutions to reduce their carbon footprint. Green logistics includes implementing sustainable operations to reduce environmental impact. With the ever-increasing environmental problem of pollution around the world, Companies are choosing eco-friendly strategies that help generate profits and reduce their carbon footprint. Such sustainable approaches by Companies also help improve brand image at a lower cost.
Thus, to support the green logistics strategy, some Companies are opting for electric vehicles for logistics, which will significantly reduce carbon emissions during the transportation of products. For instance, Deutsche Post partnered with StreetScooter GmbH, an electric vehicle manufacturer, to develop a new electric vehicle with hydrogen technology. StreetScooter is expected to deliver the vehicle to Deutsche Post from 2020 through 2021. Hence, an increase in the demand for green logistics will fuel the growth of the market in the US during the forecast period.
A major challenge for the market is the increase in cargo theft. This has led to the need for proactive security requirements such as insurance that increases the overall cost of service. Most of the movement of goods and freight within the United States is by road. Cargo theft in several US states is forcing 3PL service providers and companies to choose logistics services to invest in protecting their goods. Moreover, Businesses are spending more to insure their goods, increasing demand for various insurance plans. This increases the cost of insurance premiums, further increasing operating costs for 3PL service providers and companies who choose logistics services.
In addition to investing in securing merchandise, companies have started following various strategies, such as click and collect, which is an omnichannel distribution, to reduce the threat of cargo theft. This distribution model challenges 3PL service providers as it eliminates the need for logistics partners to deliver goods to customers. Such factors would eventually restrict the growth of the market during the forecast period.
The market growth analysis report includes the adoption lifecycle of the market, spanning from the innovator’s stage to the laggard’s stage. Furthermore, the market research and growth report includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
We also have detailed analyses of the market’s competitive landscape and offer information on 17 market Companies, including:
Technavio's market growth and forecasting report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies Companies based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The retail segment will account for a major share of the market's growth during the forecast period. The retail industry includes organized retail and consumer goods. They are classified as slow-moving consumer goods (SMCGs) and fast-moving consumer goods (FMCGs). FMCGs usually have a shelf life shorter than a year and include household and cleaning products, personal care products, tobacco, apparel and footwear, and pet food/pet care products.
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The retail segment was the largest and was valued at USD 51.40 billion in 2018. In this retail segment, the consumer goods market is experiencing growth due to the adoption of appliances such as air conditioners, refrigerators, and washing machines; personal and beauty appliances, including hairstyling devices; and consumer electronics, such as mobile devices. In the home appliance segment, refrigerators and air conditioners account for the largest share, followed by washing machines and other home appliances. Such changing consumer preferences require the company to use this 3PL services to deliver products to retailers and other customers. Therefore, the growth of the consumer electronics segment of the retail industry is expected to drive the growth of the market over the forecast period.
Based on service, the market has been segmented into transportation, warehousing and distribution, and others. The transportation segment will account for the largest share of the end-user segment. Transportation of goods in the market is done through different modes of transport, such as road, rail, air, and water. As logistics services require high investment and expertise, which adds significantly to operating costs, many companies are outsourcing these services to 3PL providers. More than half of the transportation revenue generated by 3PL service providers in the US is from roadway transportation. Such factors will increase the segment growth during the forecast period.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
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The market is witnessing unprecedented growth, driven by the convergence of energy, transportation, and the shipping industry. With the advent of digital transformation and the surge in e-commerce, businesses increasingly rely on 3PL providers to navigate complex supply chains and leverage cutting-edge software solutions for streamlined operations. In particular, AI-enabled fulfillment automation solutions revolutionize warehousing space utilization and optimize airfreight, air cargo, third-party logistics company and railway logistics. From medium and large-sized enterprises to online retailers, 3PL companies offer tailored services, including contract logistics and warehouse management systems, supported by advanced technologies like cloud computing and big data analytics. As businesses seek to enhance real-time monitoring and tracking capabilities, 3PL providers play a pivotal role in facilitating seamless operations and ensuring compliance with customs regulations and international documentation procedures in an increasingly interconnected global marketplace.
in addition, with the exponential growth of the transportation sector and the booming e-commerce industry, the demand for 3PL providers continues to soar. These providers offer a wide range of services, from warehousing and transportation to AI-enabled fulfillment automation solutions tailored for medium and large-sized enterprises and online retailing businesses. Leveraging cloud-based technologies and AI, 3PL companies facilitate item tracking and streamline operations for businesses of all sizes, including small and medium-sized enterprises venturing into omnichannel operations. Amidst evolving customs regulations and international documentation procedures, 3PL providers ensure compliance while maximizing efficiency through predictive analytics and blockchain technology, enabling seamless trade and fostering growth in the US market.
Market Scope |
|
Report Coverage |
Details |
Page number |
145 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.08% |
Market Growth 2024-2028 |
USD 120.1 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.32 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Americold Realty Trust Inc., Blu Logistics, Burris Logistics Co., C H Robinson Worldwide Inc., Crete Carrier Corp., Deutsche Post AG, Expeditors International of Washington Inc., FedEx Corp., Hub Group Inc., J B Hunt Transport Services Inc., Kenco Group Inc., Kuehne Nagel Management AG, M and W Logistics Group Inc., NFI Industries Inc., Ryder System Inc., Taylor Logistics Inc., Total Quality Logistics LLC, United Parcel Service Inc., Wagner Logistics Inc., and XPO Inc. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Service
8 Customer Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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