3PL Market as developing economies are expected to witness a steady expansion of their Ecommerce Sectors in the Coming Years

  • Posted by Pragati P
  • September 12, 2016 10:37 AM BST

Global 3PL Market: Overview

Third party logistics, also known as 3PL, is an outsourcing system wherein storage and transportation services are outsourced to a specialist company. Outsourcing these services allows companies to cut costs and focus on their core competency. Inventory management, delivery, packaging, and cross-docking services are now usually bundled with 3PL services, making the 3PL platform even more cost-effective. The global 3PL market is driven primarily by the rising preference to outsource all non-essential tasks in the corporate sector. This boosts the profit margin of the vendor significantly and the trend is expected to remain influential in the forecast period.

The global 3PL market is also driven by the increasing demand from the ecommerce sector thanks to the latter’s steady growth in recent years. This is another major driver for the global 3PL market, particularly in developing countries, where the ecommerce sector stands to grow handsomely in the coming years.

The report presents a detailed profile of the global 3PL market, including a review of the market’s historical trajectory and the key factors influencing its growth at present. The current market figures are given in detail in the report and are used to project the global 3PL market’s future. The major segments of the global 3PL market are examined in the report to get an idea of the hierarchy of the market by each criterion. The competitive landscape of the market is also examined in the report.

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Global 3PL Market: Drivers and Restraints

Apart from the increasing preference to cut costs on non-essential functionalities, the global 3PL market is majorly driven by the fall in shipping rates, which have allowed 3PL operators to make a profit even while allowing their clients to cut their own total expenditure. Utilizing 3PL results in a smoother, more streamlined supply chain, making the process of marketing and selling the products much easier

The rise of the ecommerce sector has been a major driver for the global 3PL market in the last few years. Ecommerce giants focus on selling the products through an online platform, and not all have their own logistics services. Startups, which are becoming increasingly numerous in today’s business environment, may not be able to afford their own logistics services, necessitating the use of third party logistics.

The convenience of shopping online has resulted in consumers unanimously showing their support to the expansion of ecommerce. This will remain a major driver for the global 3PL market, as developing economies are expected to witness a steady expansion of their ecommerce sectors in the coming years, leading to an increase in the demand for 3PL services.

Global 3PL Market: Regional Analysis

The global 3PL market was led by Asia Pacific in 2015. A trifecta of increasing disposable incomes, increasing availability of the Internet, and escalating investments by ecommerce players has seen the ecommerce sector grow by leaps and bounds in emerging countries such as China and India. This is expected to remain influential for the global 3PL market in the coming years.

Europe and North America accounted for the next largest shares in the global 3PL market. The recent eurozone crisis has held the Europe 3PL market back, but the increasing demand from the automotive industry is likely to turn the tide in the years ahead. Latin America is expected to become another key market for 3PL service providers in the near future due to the increasing demand for ecommerce in the region.