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Third Party Logistics Market in International Transportation Management Solution Segment is Projected Cross USD 350 billion by 2024

Author : Ronak Bora | Published Date : 2019-03-25 

Third Party Logistics Market is projected to surpass USD 1 trillion by 2024. Growing focus towards cost effectiveness and core business functions incurred in logistics are the major factors driving the third-party logistics market over the forecast timeframe. Rising transportation costs will encourage shippers to discover new alternatives in order to minimize distribution and shipping costs out of the supply chain. third party logistics market service providers offers timely and effective logistics solutions which in turn optimize transportation costs. The rising trend of e-commerce accompanied by entrepreneurial ventures will favor the third party logistics market demand for customized logistics services.

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Outsourcing operations helps various firms having less number of resources to cater higher order volume in an economical way. It also helps in cutting down costs and optimizing the overall logistics set-up which includes data warehousing of software systems, installation of more computers and processing equipment. Leading service providers are increasingly adopting IT solutions to improve their distribution coverage and enhance service quality delivered to the customers.

However, factors such as risk containment, inconsistent freight volumes, lack of trust, emphasis on cost and sluggish economical growth may restrict the industry growth. Economic downfalls have led shippers to confine their outsourcing activities to few suppliers. Thus, decreasing the number of outsourcing operations and may negatively affect the industry growth over the forecast timeframe.

Rail & road mode is expected to experience a high demand owing to the increasing domestic transportation requirements. The launch of rail freight services between Beijing and London across Asia and Europe is expected to surge the trade through the rail mode. This has enabled manufacturers to explore newer transportation options at low costs. This silk route unlocks options for shippers to reduce the transportation time.

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International transportation management (ITM) is expected to witness significant growth and exceed USD 350 billion by 2024. The domestic transportation management includes value added services as well as freight brokerage and is estimated to grow at over 5% CAGR. Warehousing and distribution (W&D) occupied over 20% of the overall third party logistics market share in 2016. It consists of long-term agreements, contract warehousing and distribution center operations with various value addition services.

As China emerges as one of most profitable grounds for the development of third party logistics market as well as the e-commerce business, it is an undeniable fact that the region has been experiencing a slight increase in labor wages and facility costs. On these grounds, European and American manufacturers have been nearshoring production to countries such as Turkey, Hungary, Morocco, Poland, and Czechoslovakia.

This has led to the generation of numerous warehouse spaces across Europe, inevitably prompting shipping companies to brainstorm newer approaches to garner profits. For instance, Maersk plans to establish a distribution network comprising warehouses to shift its shipping services from container shipping to inland transportation. Eventually, this will lead to Maersk becoming a major player in third party logistics market, as the company may outsource its operations to other regional manufacturers.

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The entry of Maersk and Amazon into third party logistics industry may pose a major challenge to the already existing service providers, nonetheless, it will enable these operators to scale up their service portfolio and offer a more diversified range of services. This service upgradation by means of deploying technological innovations will only serve to increase the growth rate of third party logistics market, which will be augmented by numerous mergers and acquisitions. Maersk’s acquisition of logistics provider Hamburg Sud, and Nestlé’s selection of third party logistics market player, Kuehne + Nagel as its logistics provider, are key instances of the alliances that will define third party logistics market in the future.

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Global Market Insights, Inc., headquartered in Delaware, U.S., is a global market research and consulting service provider; offering syndicated and custom research reports along with growth consulting services. Our business intelligence and industry research reports offer clients with penetrative insights and actionable market data specially designed and presented to aid strategic decision making. These exhaustive reports are designed via a proprietary research methodology and are available for key industries such as chemicals, advanced materials, technology, renewable energy and biotechnology.

About Author

Ronak Bora

Ronak Bora

A graduate in Electronics Engineering, Ronak writes for Fractovia.org and carries a rich experience in digital marketing, exploring how the online world works from a technical and marketing perspective. His other areas of interest include reading, music, and sport. He can be contacted at- [email protected] | https://twitter.com/RonakBora26

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