India Yet to Unveil its Full Potential in the Fourth Party Logistics Market

Introduction

The global fourth party logistics market is expected to reach a market value of USD 78,446 by 2027, with a CAGR of 4.6% during the forecast period, 2020–2027. The global shift toward dynamic logistics, especially in consumer goods, food and beverage, and medical equipment, presents a large-scale opportunity for the 4PL market.

The installation of 4PL SCM networks to manage air and ocean channels in Southeast Asia and South America offers lucrative opportunities for revenue generation, as a majority of their trade and transportation is carried out via land. Sophisticated demand-driven strategies, real-time order processing, and inventory optimization can open new opportunities in the upcoming years. The proper integration of technology can co-ordinate services on various levels, thereby reducing additional charges for low-income countries.

Most transportation is managed after the order is created and processed. In today’s tech-savvy world led by digitalization, hundreds and thousands of domestic and international orders are placed every minute. Therefore, with enhanced vision and forecasting, 4PL can pre-determine consumer behavior across a particular region and build intelligent shipments based on the expected demand.

The increasing struggle with the global logistics and supply chain has forced companies to contact local 3PLs that have little or no relationship with other providers. These companies can opt for technologically advanced 4PL, which offers global visibility and facilitates planning and execution for the global customer, OEM, contract manufacturers, suppliers, and carriers.

4PL can leverage today’s multi-enterprise cloud networks to aggregate multi-party shipments from one continent to another, known as the global fulfillment lane. No single company, even with enough volume and frequency, could match the reduced cost and supply variability offered by well-integrated fourth party logistic (4PL) services.

Market Segmentations

By Type

The solution integrator model segment by type is expected to grow at a CAGR of 4.3% during the forecast period, 2020–2027. Companies and organizations around the globe are partnering with 4PL providers to access back-end system integration, increased market transparency for goods and services, standardization and automation of order placement, and reduced procurement costs and order cycle times. For example, in October 2018, Opel and Vauxhall brands renewed their 4PL partnership with GEFCO for the integration of supply chain networks for a four-year period.

By End User

The automotive sector is expected to grow at the highest CAGR of 4.75% during the forecast period, 2020–2027. The high cost of investment required to change obsolete systems has increased the demand for more sophisticated ways to manage supply chain networks by OEMs. 4PL ensures the right transport of parts and equipment by consignment basis — parcel, groupage, full truck load (FTL), ocean, or air — in the automotive sector.

By Country

The India FPL market was valued at USD 2,498 million in 2019. The country offers lucrative opportunities for the growth of 4PL as a provider of a well-connected and organized supply chain network in upcoming years. India ranked 44th in the World Bank’s Logistics Performance Index (LPI) in terms of overall logistics performance in 2018.

An article on the Indian logistics sector published on the ‘Make in India’ site in June 2019 states that the Indian logistics sector is currently valued at USD 160 billion and expected to grow to USD 215 billion during the forecast period. The sector is one of the largest job providers in the country and employs more than 22 million people.

Competitive Players

1. CEVA Logistics
2. Deutsche Post AG
3. United Parcel Service, Inc.
4. Global4PL Supply Chain Services
5. Panalpina World Transport
6. C.H. Robinson, Worldwide Inc.
7. Accenture Consulting
8. XPO Logistics Inc.
9. 4PL Group
10. Panalpina World Transport (Holding) Ltd.
11. Deloitte Touche Tohmatsu LLC
12. Global4PL
13. Logistics Plus Inc.
14. CEVA Logistics
15. DAMCO

Recent Developments

January 2023 – Leidos acquired 1901 Group, a provider of cybersecurity, digital modernization, managed IT services, and cloud solutions for commercial and federal customers. The acquisition added 400 IT, cloud, and cyber specialists to the Leidos team and strengthened its position in the 4PL market.

December 2023 –The National Defense Authorization Act aims to protect the national security and economic interests of the US by restricting the involvement of foreign adversaries, such as China and Russia, in the supply chain of the DoD. The NDAA also supports the modernization and innovation of the defense infrastructure and capabilities by promoting the use of data centers, drones, and intelligence technologies.

Segmentation

1. By Type
   1. Synergy Plus Operating Model
   2. Industry Innovator Model
   3. Solution Integrator Model 
2. By End-User
   1. Manufacturing
   2. Retail
   3. Healthcare
   4. Automotive
   5. Others