Third party logistics, also known as 3PL, is a set of services offered to vendors to supervise and carry out the storage, transportation, maintenance, and delivery of the products of the vendor. Thus, third party logistics serves as an alternative to having an incorporated logistics team. 3PL services are usually cheaper than having one’s own logistics team and offer a high standard of service. The cost advantage of outsourcing logistics services and the increased efficiency of the supply chain as a result of using 3PL services are the major drivers for the global 3PL market in the 2016-2020 forecast period.
Rising Ecommerce Sector in Asia Pacific Drives Global 3PL Market
One of the major drivers for the global 3PL market is the rapid expansion of the ecommerce sector, particularly in emerging economies. Due to the increasing availability of broadband Internet in remote areas, the ecommerce sector has attained a strong growth rate in developing regions such as Asia Pacific in the last few years. This has emerged as a strong growth driver for the 3PL market, since outsourcing logistics services is beneficial for both the ecommerce platform and the vendors operating on it.
The sustained demand for ecommerce from countries such as China, Japan, and India is expected to remain a key growth driver for the global 3PL market in the coming years. The global 3PL market is expected to exhibit a strong one-digit CAGR in the 2016-2020 forecast period, according to the latest market research.
The ecommerce sector is also far from sluggish in other developing parts of the world, such as Latin America and the Middle East. These regions are expected to become key players in the global 3PL market in the coming years.
Technological Advancement to Ease the Growth of Global 3PL Market
The high operational costs of 3PL services and the resultant competitive pressure to keep costs low have hindered the major players in the global 3PL market in recent years. The ongoing technological innovation aimed at improving supply chain management is expected to help the global 3PL market massively in the coming years, as it will make it easier for companies to offer high-quality services at affordable prices.