Thursday, December 1 2022

DUBLIN, April 15, 2022–(BUSINESS WIRE)–The report “3PL Market in the United States – Growth, Trends, Impact of COVID-19, and Forecast (2022 – 2027)” has been added to from ResearchAndMarkets.com offer.

The 3PL market in the United States is expected to grow at a CAGR of over 6% during the forecast period 2022-2027.

Covid-19 has transformed businesses across the globe with greater focus on optimizing the supply chain, growing 3PLs, and solving essential and non-essential delivery challenges.

Building supply chains more resilient to shocks like COVID-19 requires a “blended” approach from shippers for localized and global sourcing. With the lockdown in place, the transport sector, on which supply chain activities depend, remained partially closed.

Consequently, there were constraints on the smooth functioning of supply chains, which negatively impacted global business and industrial activities. The shipping industry, which accounts for around 90% of business activity, has been affected by the pandemic.

The 3PL market in the United States is driven by the increasing level of cross-border trade. Additionally, the financial benefits of using 3PL are expected to drive the growth of the 3PL market.

Therefore, 3PLs are going through a digital transformation and investing in end-to-end solutions and end-to-end visibility to meet growing customer demand.

However, 3PL operators also face various challenges. First, the development of the e-commerce sector and the consequent increase in demand for services that manage supply chains around the world are expected to pose challenges to the functioning of the market.

Manufacturers and retailers are focusing on their core competencies and now more easily outsource functions such as logistics to those with the expertise. Thus, the increase in competition has diverted the attention of manufacturers to promote their respective specializations in production and distribution.

Leading third-party logistics providers are investing heavily in new technologies, expanding their service portfolio and expanding their global reach. Software solutions widely used by companies for logistics applications.

Main market trends

E-commerce driving the 3PL market

With the growing penetration of e-commerce in the US market, consumers are demanding personalized shipping as well as real-time shipment visibility. These demands are driving 3PL service providers to focus on overall network optimization and creating an agile supply chain through innovation and optimization for greater visibility.

Even though e-commerce has been a key driver of demand for sophisticated and high-end logistics services from 3PLs, the market is rapidly disrupting.

Companies like Amazon, Shopify, an e-commerce market leader, acquired 6 River Systems. 6 River Systems is a provider of AI-powered fulfillment automation solutions – focused on faster picking, sorting, turnaround and throughput. 6 River Systems lists XPO Logistics and other 3PL companies among its customers. Such scenarios indicate the level of sophistication and ongoing disruptions in a rapidly changing market.

Even though e-commerce is expected to be a key driver of demand for 3PL services, retailers and online marketplaces such as Amazon and Shopify would also need specialized 3PL support (given their scale).

Therefore, 3PL companies are expected to upgrade technology and acquire disruptive solution providers – so that the outsourcing requirements of large and major customers can be met and the required end customer satisfaction can be achieved.

Increase in demand for warehouse space

Growing demand in key areas such as automotive, manufacturing, retail, technology, healthcare, and construction is expected to create strong demand for warehousing space in the years to come.

Manufacturing companies are asking for outsourcing of warehousing services to facilitate their production and operational expansion.

Additionally, given the benefits of outsourcing in terms of increased operational efficiency and cost savings, shippers are increasingly outsourcing the logistics portion of their operations to warehouse service providers to meet the growing demand for fast delivery.

It also allows them to focus on their core skills. Moreover, with the growing popularity of frozen foods, the demand for refrigerated storage and warehousing has also increased.

Many logistics service providers and retailers have started establishing dedicated warehouse space for their business in the market.

In 2020, China Manufacturers Alliance LLC (CMA)/Double Coin Tires opened warehouses in Rancho Cucamonga and Riverside (USA) to expand truck/bus and OTR tire capacity in the coming years. The addition of these facilities has expanded the company’s warehouse footprint to approximately 338,000 square feet, adding an additional capacity of approximately 225,000 units.

Competitive landscape

The market is relatively fragmented with a large number of local and international players including CH Robinson, XPO Logistics, UPS Supply Chain, Expeditors, and JB Hunt as major players. Market fragmentation is expected to decrease as companies in the industry actively merge and consolidate to take advantage of economies of scale.

Companies cited

For more information about this report visit https://www.researchandmarkets.com/r/vknea4

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220415005085/en/

contacts

ResearchAndMarkets.com
Laura Wood, Senior Press Officer
[email protected]
For EST business hours, call 1-917-300-0470
For US/CAN call toll free 1-800-526-8630
For GMT office hours call +353-1-416-8900

Previous

FT Weekend Quiz: 'The Weak Link', 'Tintin' and the Death Card

Next

Vermont unemployment rate drops two ticks to 2.7% in March

Check Also