III. Industry Analysis
3.1 Industry Profile
The 3PL (Third-Party Logistics) industry is rapidly growing, providing outsourcing services for various supply chain management functions such as transportation, warehousing, and distribution. The industry has evolved in response to the increasing demand for cost-effective, reliable, and efficient supply chain solutions from companies across various industries. The anticipated growth of the 3PL logistics sector is set to persist in the upcoming years due to rising demand from enterprises seeking to enhance their supply chain efficacy and lower expenses.
Around 37% of vendors have expressed their intention to engage new 3PL fulfillment providers or switch their existing ones2. The cost of renting warehousing facilities is expected to surge by 10% in the next 12 months, and it is projected to be a shortage of 140 million square footage of warehouse space by 2024, resulting in an increase in storage fees3. Conversely, 3PLs have strongholds over their storage premises, and higher order values from their retail partners give them grounds to keep their warehouse space. The trend of using 3PL services is on the rise as businesses look for ways to cut costs and optimize their supply chains.
3.2 Market Size
Over the past decade, the 3PL sector has experienced growth on a global scale, reaching revenues of $961.8 billion in 20204.The global third-party logistics market is estimated to grow from $976.2 billion in 2021 to $1.70 trillion in 2028 at a CAGR of 8.26% during the forecast period 2021-20285.
In the US, the third-party logistics (3PL) industry is on the rise, with a steady increase in total revenue each year. The industry's revenue reached an impressive $347.9 billion in 20216.
The Asia Pacific 3PL market is the largest one worldwide in a regional comparison, which made over $389 billion in 20207.
E-commerce companies are the leading consumers of 3PL services, accounting for nearly 53% of the market8.
3.https://www.shopify.com/in/enterprise/third-party-logistics-3pl
4.https://www.statista.com/statistics/638368/us-third-party-logistics-market/
5.https://www.fortunebusinessinsights.com/third-party-logistics-market-105802
6.https://www.statista.com/statistics/638368/us-third-party-logistics-market/
7.https://www.statista.com/statistics/418206/3pl-logistics-industry-revenue-worldwide/
8.https://www.globenewswire.com/en/news-release/2022/06/29/2471498/0/en/Third-Party-Logistics-Market-to-Reach-1924-31-Billion-E-commerce-is-Holding-more-than-50-Market-Share.html
