Third Party Logistics (3PL) Market Size & Outlook, 2025-2033

Third Party Logistics (3pl) Market Size

The global third-party logistics (3PL) market revenue was valued at USD 1239.33 billion in 2024. It is projected to reach from USD 1350.87 billion in 2025 to USD 2691.69 billion by 2033, growing at a CAGR of 9% during the forecast period (2025-2033).

Third-party logistics (3PL) is the method of outsourcing warehouse management operations, inventory operations, and shipping services across the globe. These services also augment the order fulfillment operations, transportation, freight forwarding, picking, and packing. 3PL focuses on the entire supply chain management operations, from the package pickup to the delivery of the products. The increasing trend of utilization of these services due to the emergence of distribution outsourcing drives market growth.

The 3PL market is growing worldwide, with different regions having different drivers. In North America, partnerships are the key to success. In Asia-Pacific, China's export boom and India's maritime projects fuel the demand. In Europe, retail and e-commerce sectors lead the growth. In Latin America, technology helps overcome infrastructure issues. In the Middle East, e-commerce and infrastructure development boost the investment.

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Third Party Logistics (3pl) Market Growth Factors

Ability to Elevate Customer Experience Standards and Effectively Manage Demand Fluctuations

Every market has a certain degree of demand fluctuations, and the manufacturers need to cope with the fluctuations. Third-Party Logistics (3PL) services provide effective inventory management and product warehousing. These solutions offered by these companies enable manufacturing companies to regulate their manufacturing operations without getting concerned about the proper storage of the manufactured products. Third-Party Logistics also works to maintain a supply of the company's products across the various regions in the market, which helps the company increase its product availability across the markets. Third-Party Logistics offers distribution, shipping, and warehousing of the products of manufacturers. Significant improvement in the overall supply chain management is anticipated to bolster the use of Third Party Logistics during the forecast years.

Better Warehousing Management Solutions to Focus on Growth across Potential Regions in Market

Many companies wish to enter into untapped markets to improve their performance and sales footprints across multiple regions. Although, limitations such as the unavailability of established shipping and delivery solutions and the need for warehouse infrastructure and inventory storage restrict these companies from operating across multiple regions. Third-party logistics provides the manufacturers with all these services and helps them improve their business in various potential regions.

The companies can increase their market penetration and product availability without making substantial investments in warehouse establishment and strengthening their distribution chain. Thus, 3PL stands very useful for organizations trying to improve their global sales footprints. The tier 2 and tier 3 players are expected to contribute significantly as these companies do not possess a strong distribution channel and warehouse infrastructure outside their regional market. Third-party logistics services stand as the optimum solution for these companies to initiate operations in the potential regions.

Market Restraint

Less Interaction within the Transit Lot of Products and Less Control over the Process of Delivery

Third-Party Logistics operators pick up the packages from the manufacturing facilities and initiate shipping and inventory management operations of these products as per the requirements of the products at different regions. Although, manufacturers tend to lose control of the supply chain management of their products. The interactions of an unknown third-party supplier with the products of the company may restrict certain manufacturers from using third-party logistics services. The manufacturer also faces difficulties in tracking the process of delivery, further reducing the hold and control on the in-transit shipments. Additionally, during quality assurance and testing, companies usually identify anomalies and need to alter the manufactured products to eliminate the problems. The companies operating their own delivery process can perform this task efficiently, while the manufacturers operating with third-party logistics face difficulties.

Regional Analysis

North America's third-party logistics (3PL) market, owing to the rising partnership and collaboration activities between third-party logistics providers. Out of total logistics operations, about 12.4% is carried out using third-party logistics (3PL) service providers. The increasing prominence of contract carriage service in the U.S. and the presence of prominent players, such as UPS Supply Chain Solutions Inc., and XPO Logistics, Inc., drive the market growth. In addition, several government measures are implemented to further accelerate the North American Third-party logistics sector. These projects are implemented in order to improve market-influencing technologies. These initiatives provide numerous benefits to Third-party logistics companies in the region, fostering the expansion of the region.

Asia-Pacific Market Trends

Asia-Pacific is expected to witness the highest growth rate in the 3PL market. China is anticipated to emerge as a significant contributor to the third-party logistics market in the Asia Pacific region. Robust export activities of the manufacturers operating in China are anticipated to drive the growth of the market in the region. The use of third-party logistics for cross-border trade is anticipated to significantly contribute to the development of the market. The maritime transport development initiatives by the government of India are anticipated to boost market growth. As per the government initiative, India is aiming to surplus the capacity of its 18 major ports by 25% to increase and augment maritime shipments. Similarly, the Vietnam government is taking decisive steps in making noteworthy developments in the marine transport network.

Europe is expected to witness substantial growth over the forecast period. The region's largest retail and e-commerce industries are among the largest users of third-party logistics. In extremely competitive markets, such as the United Kingdom, delivery time is a crucial issue for shops and online stores. Therefore, businesses outsource their logistics to delivery professionals, and both large and small stores can compete with next-day, on-demand delivery. The U.K. is one of the world's leading trade nations, exporting the majority of its goods to numerous European nations. Due to developed infrastructure, a sophisticated supply chain network, and the presence of global businesses, the freight and logistics market in the country has formed a solid foundation over the years.

The growth of the Latin American logistics market is propelled by an increase in technologically driven logistics services, a surge in the adoption of IoT-enabled linked devices, and the expansion of the e-commerce market. However, the lack of necessary infrastructure, the high cost of logistics, and the lack of manufacturers' control over logistics services restrict the market's expansion. The governments of the Middle Eastern countries are supporting the 3PL and logistics sector through a variety of initiatives, laws, and investment incentives to entice firms to invest in the country and provide customers with logistical services. Additionally, e-commerce has emerged as a major market driver in the region. The number of e-commerce sales has increased; local vendors, merchants, wholesalers, and manufacturing units are focused on online channels to boost their sales. In addition, the advent of automated material handling equipment and the increasing use of GPS-enabled and RFID-based gadgets is driving up demand for logistic services. In addition, the UAE government's increased investments in renovating existing seaports, distribution centers, free zones, and freight terminals, among other things, stimulate the need for logistic services.

Mode of Transport Analysis

The market is segmented into ground/roadways transport, waterways/ maritime transport, railways transport, and air transport. Ground/Roadways Transport dominates the market in Mode of Transport. Roadways transport accounted for over 58.2% in 2023. Over the course of the forecast period, it is anticipated that the expansion of roadways will be driven by the emerging model of public-private partnerships as well as the increased emphasis on supply chain infrastructure. Additionally, the expansion of the road transportation sector is being fueled by a number of initiatives undertaken by the government. It is anticipated that the recent regulations that were imposed by the Federal Motor Carrier Safety Administration and that permit the use of cameras as an alternative to rearview mirrors will be beneficial to truck drivers in terms of safety.

The airline segment is anticipated to emerge as the segment with the highest growth rate, expanding at a compound annual growth rate of 9.1% over the period of the forecast. Due to the recent outbreak of the coronavirus, there has been a restriction placed on the global air freight trade. This has led to a significant decrease in the capacity of the air uplift, which has resulted in an increase in the rates charged by carriers. A number of businesses, including CEVA Logistics, have initiated medical relief cargo charters for the purpose of delivering emergency supplies and equipment, including personal protective equipment (PPE) kits, facial masks, gloves, hand sanitizers, disposable gowns, respirators, ventilators, and other COVID-19 relief provisions.

Industry Verticals Analysis

The market is segmented into e-commerce and retail, healthcare and pharmaceuticals, manufacturing, and automotive. The manufacturing industry had the highest revenue share in 2023, accounting for 24.8% of the total. Given the intricate nature of the supply chain process in the manufacturing industry, manufacturing and logistics go hand in hand. The manufacturing industry is responsible for the acquisition of raw materials and other components from a variety of resources located in various regions within the country. Transporting goods is a laborious task because it requires the participation of a number of different distributors and suppliers. As a result, the manufacturing industry is outsourcing transportation activities because of the benefits that are offered in terms of decreased transportation costs, visibility throughout the supply chain, management of inventory and vendors, development of business processes, and enhancement of customer service. In recent years, the manufacturing industry in the United States of America, Mexico, China, and India has seen an increase in the number of transportation activities that are outsourced. There are a number of tax reform policies and government initiatives in India, such as the "Made in the USA" and "Make in India" projects, which are contributing to the expansion of the domestic manufacturing sector.

Service Analysis

The market is segmented into freight forwarding, warehousing and distribution, domestic transportation management, value-added logistics services, and international transportation management. The most significant portion of the market was under the control of Domestic Transportation Management. The provision of services for the management of domestic transportation is carried out in conjunction with freight brokers, who are responsible for monitoring the origin and destination of shipments. The expansion of this segment is being driven by a number of factors, including an increase in the amount of trade movement between warehouse unloading docks and warehouses, an increase in carrier rates, an increase in cross-docking services, and an increase in the fuel surcharge. Both the consistent growth of the gross domestic product (GDP) of a number of countries and the growing demand from consumers in industries such as retail and healthcare are contributing factors to the expansion of this segment. The demand for international transportation management services has increased as a result of the ongoing expansion of economic activities on a global scale as well as the expansion of the e-commerce industry.

List of key players in Third Party Logistics (3PL) Market

1. H. Robinson Worldwide (CHRW) Inc.
2. FedEx Corporation
3. Nippon Express Co., Ltd.
4. BDP International
5. XPO LogisticsInc
6. DB Schenker Logistics
7. Burris Logistics
8. CEVA Logistics
9. Kuehne + Nagel International AG
10. DSV Panalpina A/S
11. Yusen Logistics Co. Ltd. (Nippon Yusen)
12. UPS Supply Chain Solutions, Inc.

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Recent Developments

• March 2024 - EFL 3PL has launched a flagship Grade A warehousing facility in Bhiwandi, Mumbai, with a USD 5 million investment. This 175,000-square-foot warehouse features advanced logistics technologies, enhancing EFL 3PL's end-to-end logistics solutions. The expansion underscores EFL's commitment to the Indian market, aiming to improve service efficiency and meet diverse client needs.
• July 2024 - At the Multimodal event in Birmingham, the UK's premier supply chain conference and logistics expo, Maersk was honored as the distinguished "3PL Company of the Year." A valuable recognition for one of the main products from Maersk's Logistics & Services portfolio, this award recognizes excellence in supply chain management and logistics.