The third party logistics market facilitates external logistics service providers who handle transportation management, warehousing management, freight forwarding, and inventory management on behalf of their clients. These services help organizations reduce costs related to supply chain and logistics along with enhancing operational efficiencies. Growing volumes of trade activities across industries has led to increased demand for transportation of goods from one destination to the other and proper storage of goods which has spurred the growth of third party logistics market.
The global third party logistics market is estimated to be valued at US$ 1.63 Mn in 2024 and is expected to exhibit a CAGR of 5.9% over the forecast period 2024 to 2030.
Key players operating in the third party logistics market include Johnson Controls (including ANSUL), Solberg (a division of Amerex Corporation), Dr. Sthamer, National Foam (a part of Kidde-Fenwal, Inc.), Eau&Feu, Dafo Fomtec AB, ICL Performance Products, KV Fire Chemicals, Auxquimia & Angus Fire. These players are focusing on expanding their logistics infrastructure and capabilities through strategic acquisitions and partnerships to generate higher revenues and strengthen market presence.
The Third Party Logistics Market provides various opportunities for logistics players such as multi-modal transportation penetration in developing regions, investing in technology solutions for improving order delivery time and inventory management, and penetrating underserved sectors. Rising industrialization in Asia Pacific and Latin America will drive demand for outsourced logistics services in these regions, offering lucrative growth opportunities.
Global expansion in the third party logistics market is anticipated with major players increasingly investing in emerging economies to cater to the steadily increasing demand for transportation and warehousing services from prominent industries such as automotive, pharmaceutical, retail, and food and beverage. Latin America and Asia Pacific are considered high potential markets owing to rapid urbanization and industrialization in these regions.
Market drivers and restrain
The key driver for third party logistics market is increased demand for transportation services from various end use industries. Growing volumes of goods exchanged between manufacturers and end consumers has led to rising demand for efficient goods transportation through various modes like road, railway, air and shipping. This has significantly driven the growth of third party logistics market over the years.
However, lack of skilled workforce and volatile fuel prices pose as key restraints for the third party logistics market. Attracting and retaining skilled staff is challenging for logistics companies. Also, fluctuation in fuel prices impacts the overall transportation costs which in turn affects the profit margins of third party logistics providers.
The third party logistics market can be segmented based on end use into retail, automotive, healthcare, food and beverages, others. The retail segment dominated the market in 2024 and is expected to remain the largest segment during the forecast period. This is due to the growing number of vendors adopting third party logistics to efficiently manage and deliver goods to consumers across countries.
Geographically, the North America region dominated the third party logistics market in 2024 and is expected to continue its dominance during the forecast period. This is attributed to the presence of major players in countries such as US and Canada. Additionally, growing focus on reducing logistics cost by companies in the region is also contributing to the market growth. Asia Pacific region is expected to grow at the fastest rate during the forecast period owing to rising industrial activities and improving infrastructure in developing countries such as China and India.
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