Originally published on Technavio:US Third-party Logistics (3PL) Market Analysis: End-user and Service - Forecast and Analysis 2023-2027
Forecast for US 3PL Market 2023-2027
The US third-party logistics (3PL) market is projected to expand by USD 117.1 billion at a CAGR of 8.42% between 2022 and 2027. This growth hinges on factors like the increasing cross-border trade, cost benefits associated with 3PL usage, and the rising adoption of multimodal transport.
US 3PL Market size
The market growth analysis encompasses the entire adoption lifecycle, from innovators to laggards. Additionally, it includes key purchase criteria and drivers of price sensitivity to assist companies in evaluating and refining their growth strategies.
Customer Landscape
Our researchers conducted an analysis using 2022 as the base year, focusing on key drivers, trends, and challenges. A comprehensive examination of drivers will aid companies in refining their marketing strategies for a competitive edge.
Key Driver
The significant driver propelling market growth is the increasing utilization of multimodal transport. This entails combining two or more modes of transport—such as road, rail, air, or seafor freight transport. By amalgamating multiple transport modes, storage costs can be reduced, and the cost of goods lowered. Multimodal transportation also facilitates efficient product transport, thereby decreasing outbound logistics transportation expenses.
For example, FedEx Corp.
Significant Trends
A notable trend in the US 3PL market is the growing demand for green logistics. Escalating global warming concerns are compelling market suppliers to adopt green logistics solutions to curtail their carbon footprint. Green logistics involves implementing sustainable operations to mitigate environmental impact. In light of the escalating environmental pollution, companies are embracing eco-friendly strategies that yield profits while reducing their carbon footprint. Such sustainable initiatives not only enhance brand image but also come at a lower cost.
Americold Realty Trust Inc: The company offers third-party logistics services providing real-time information on dispatched orders.
Burris Logistics Co: The company offers third-party logistics services through inventory management services, encompassing inventory planning, replenishment services, and inventory cost accounting.
Moreover, we provide detailed analyses of the market's competitive landscape and information on 20 market players, including.
Market Segmentation by End-user, Service, and Geography
End-User Segment Analysis
The retail segment will spearhead a significant share of market growth during the forecast period. The retail industry encompasses organized retail and consumer goods, categorized as slow-moving consumer goods (SMCGs) and fast-moving consumer goods (FMCGs). FMCGs typically 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.
US 3PL Market Size
The retail segment was valued at USD 47.02 billion in 2017 and continued its upward trajectory until 2021. Within the retail segment, the consumer electronics market is witnessing growth due to the adoption of appliances like air conditioners, refrigerators, washing machines, personal and beauty appliances, and consumer electronics. Refrigerators and air conditioners dominate the home appliance segment, followed by washing machines and other home appliances. Evolving consumer preferences necessitate companies to utilize 3PL services for product delivery to retailers and other customers. Hence, the consumer electronics segment's growth in the retail industry is anticipated to drive market growth over the forecast period.
Service Segment Analysis
The transportation segment will command the largest share of the end-user segment. Goods transportation in the market occurs through various transport modes, including road, rail, air, and water. As logistics services entail substantial investment and expertise, significantly adding to operating costs, many companies are outsourcing these services to 3PL providers. Over half of the transportation revenue generated by US 3PL service providers stems from roadway transportation. Such factors will amplify segment growth during the forecast period.
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The market is rapidly evolving to meet diverse supply chain requirements, with a focus on cost savings, efficiency, and superior customer service. Logistics operations now leverage advanced tools and cloud-based platforms for enhanced visibility and transparency. E-commerce and online shopping are driving demand for fulfillment and delivery, spurring the adoption of end-to-end solutions.
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