Third-party Logistics Market Size, Share & Trends Report

Third-party Logistics Market Size, Share & Trends Analysis Report By Service (DTM, ITM, VAL), By End Use (Retail, Manufacturing, Automotive), By Transport, By Region, And Segment Forecasts, 2020 - 2027

  • Published Date: Jul, 2020
  • Base Year for Estimate: 2019
  • Report ID: 978-1-68038-346-1
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 219

Report Overview

The global third-party logistics market size was valued at USD 830.99 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 8.3% from 2020 to 2027. The development of logistics infrastructure in Asia and Middle East, the thriving growth of the e-commerce sector, and the development of new technologies are expected to significantly contribute to the market growth. Shippers are focusing on outsourcing the logistics activity to enhance their operations and cost-effectiveness. The increased working capital and globalization lead to the demand for efficient inventory management services. Moreover, the restructuring of the brick and mortar business model continues to provide dynamic growth to the industry.

U.S. third-party logistics market size

The changing global supply chain to become more customer-centric enables the companies to outsource their supply chain activities to focus on adaptability and responsiveness. Moreover, the volatile international documentation procedure and customs rules & regulations need the expertise to handle the complex supply chain activity. As a result, small and medium-sized businesses are also leveraging Third-party Logistics (3PL) services.

The rise of e-commerce and digital phenomenon, also called 'The Amazon Effect', has changed consumer expectations and buying behavior. End-users are seeking unparalleled expectations in terms of convenience, cost, control, and choice. Omni-channel operation demands reliable, fast, and free shipping services, which has resulted in companies adopting a new business model to provide low-cost and on-demand delivery services. 3PL companies embrace various modifications in supply chain management to address the notable transformations and challenges that e-commerce presents.

The third-party logistics companies are shifting their focus from long-haul delivery to just-in-time delivery. The suppliers are also transitioning from multiple storage facilities to a single warehouse location. To accommodate an increase in last-mile delivery, 3PL companies invest in smaller trucks and vans, which can support shorter and more frequent deliveries. In the coming years, last-mile delivery is presumed to be one of the key areas of focus for logistics companies.

Fourth-Party Logistics (4PL) is the step ahead that can manage resources, infrastructure, technology, and even external 3PL to provide a holistic supply chain solution. The 4PL companies offer comprehensive consulting services in addition to logistics operations. The service includes logistics strategy, inbound and outbound logistics, inventory planning and management, business planning, and analytics. Deloitte, Accenture plc, BDP International, and DB Schenker Logistics are some of the companies that are offering 4PL services. 4PL is a relatively new concept, but it is expected to gain momentum in the coming years from medium and large businesses seeking a complete logistics solution.

COVID-19 Impact Analysis

The Coronavirus pandemic has impacted the supply chain operations globally. The crisis placed an unprecedented strain on transportation and logistics resources. The shippers are facing uncertainty in the movement of goods owing to the mandated lockdown in certain countries. The logistics networks are being disrupted due to the supply/demand imbalance and lack of capacity for the long-haul and last-mile fulfillment services. The limited staff and reduced working time are further limiting the logistics activities.

The outbreak of COVID-19 has a domino effect on the Domestic Transportation Management (DTM) service. There has been an imbalance between the incoming and outgoing freights in the infected areas, which is increasing the lead time. Service providers face numerous problems such as disruption of transportation due to the boundary closure and increased demand for warehouse facilities to store the existing goods that can no longer be sold due to lockdown. To tackle this situation, 3PL companies have started short term storage identification services. DB Schenker Logistics is implementing a service that identifies unused space for warehouses. This service is expected to inform customers about the storage space across 794 locations in 60 countries to find the additional warehouse space near the manufacturing facility.

The road transportation is majorly affected by the current health crisis. There has been a significant drop in the truckload volumes, resulting in limiting the movement of heavy-duty and medium-duty trucks. Ocean freight operations are under control with limited capacity and a slight drop in the trade volume. According to the latest data issued by Port of Los Angeles (POLA) and Port of Long Beach (POLB), both ports have experienced a decline in the trade volume for March 2020 due to the impact of the COVID-19. The delay in customs clearance and increasing blank sailing have resulted in pilling up the shipping containers at the ports, which hinders the delivery of goods. Many airlines have started to use passenger aircraft as a cargo carrier, considering the prolonged restrictions on international passenger flights. As a result, there has been a steep increase in the carrier rates of air transportation.

Service Insights

The Domestic Transportation Management (DTM) segment held the largest market share of about 32% in 2019. DTM services are performed in conjunction with freight brokers, which deal with shipment origin to their destination. The increasing trade movement among the unloading dock to a warehouse, escalating carrier rates, a surge in cross-docking services, and rising fuel surcharge are driving the growth of the DTM segment. The growing consumer demand in sectors such as retail, healthcare, and the steady GDP growth of various countries is further aiding the segment growth.

The continued growth in global economic activities and a rise in the e-commerce sector have led to an increase in demand for international transportation management services. Trade liberalization policies and cross-border logistics activities have increased international trade, thereby propelling the segment growth. Free Trade Agreements (FTAs) are driving the demand for international transportation. The African Continental Free Trade Area (AfCFTA) and Progressive Trans-Pacific Partnership (CPTPP) are the two recent examples of rising multilateral free-trade agreements. The several bilateral free-trade agreements such as Costa Rica- South Korea FTA and Indonesia–Australia comprehensive economic partnership agreement are influencing the demand for international transportation services.

Transport Insights

The roadways segment dominated the 3PL market with a value of over USD 490 billion in 2019. The growing public-private partnerships model and increased emphasis on logistics infrastructure are expected to drive the growth of roadways over the forecast period. Besides, several government initiatives are fueling the growth of the road transportation segment. The recent regulations imposed by the Federal Motor Carrier Safety Administration that allow the use of the cameras as a substitute for rearview mirrors are expected to benefit the truck drivers in terms of safety.

The airways segment is anticipated to grow at the highest rate over the forecast period. The recent coronavirus outbreak has put a restriction on the global air freight trade resulting in the massive drop in the air uplift capacity, thereby increasing the carrier rates. Some companies such as CEVA Logistics have started the medical relief cargo charters for emergency shipments such as PPE kits, facial masks, gloves, hands sanitizers, disposable gowns, respirators, ventilators, other COVID 19 relief equipment, and supplies.

End-use Insights

The manufacturing sector held the largest revenue share of 24.2% in 2019. Manufacturing and logistics go hand in hand as the industry has a complex supply chain process. The manufacturing sector involves the procurement of raw materials and other parts from different resources across the regions. The involvement of various suppliers and distributors makes the logistics activity a tedious job. Thereby, the manufacturing sector is outsourcing the logistics activities owing to the benefits offered in terms of reduced transportation cost, supply chain visibility, inventory and vendor management, business process development, and improved customer services. The buoyant manufacturing sector in the U.S., Mexico, China, and India has witnessed an increase in outsourced logistics activities. The local manufacturing sector in India is growing with several tax reform policies and government initiatives such as 'Made in the USA' and 'Make in India' projects.

Global third-party logistics market share

The retail sector is expected to witness the highest growth rate over the forecast period. Logistics is the backbone of the modern retail industry, playing a crucial role in same-day delivery and fulfillment capabilities. E-retailing and dedicated logistics services have paved the way for medium scale companies to enter the third-party logistics market, thereby helping the retail companies to expand their operations and offerings in semi-urban areas. Furthermore, 3PL offers flexibility to retail businesses to develop new products, enhance capabilities, and expand their regional presence.

Regional Insights

North America held the largest market share of over 24% in 2019, with the U.S. spearheading the regional market growth. The tight truck capacity across the U.S. has led the shippers to move towards dedicated contract carriage services. Besides, the rising demand for cold storage in the region is expected to boost the third-party logistics market. Moreover, the presence of key players, including C.H. Robinson Worldwide (CHRW) Inc., XPO Logistics, Inc., UPS Supply Chain Solutions Inc, and Expeditors International of Washington, Inc. aid aiding the regional market growth.

Asia Pacific is expected to expand at the highest CAGR over the forecast period. The growing trans-regional trade corridors and gateways are expected to create a huge opportunity for the 3PL providers. The concentration of manufacturing and sourcing in China has led towards the strategic shift of technology, pharmaceuticals, and the automotive sector in other countries. Such a shift is expected to propel the market growth in countries, including India, South Korea, Japan, and Vietnam.

The ongoing development of logistics infrastructure and increasing emphasis on transportation practices in the emerging countries are expected to propel the market growth. For instance, the National Highways Authority of India (NHAI) and the National Highways Development Project (NHDP) have taken several initiatives for highway development. Under the Logistics Efficiency Enhancement Program (LEEP) set by the Government of India, the Ministry of Road Transport & Highways (MoRTH) is developing the multi-modal logistics parks. Vietnam government proposed Vietnam Sea Transport Development Plan, vision to 2030 to escalate the maritime freight transportation. Under this plan, the government planned to invest in developing the deepwater port, transit port, and international gateway ports.

Key Companies & Market Share Insights

The key players in the market include DB Schenker Logistics; C.H. Robinson Worldwide Inc.; DHL International GmbH; FedEx Corporation; Kuehne + Nagel International AG; Nippon Express Co., Ltd.; and UPS Supply Chain Solutions Inc. The companies are stressing on providing technological-driven services such as route optimization and real-time shipment tracking. The companies are also trying to maintain complete visibility over the entire supply chain without overburdening the clients. The strengthening of shipper-carrier relationships increases information sharing and transparency among both parties, creating a favorable business environment.

The market is witnessing strong M&A activity from the last several years. Key companies are engaging in partnership, mergers, and acquisitions with small and medium-sized companies aiming to leverage their regional capabilities. Key companies are sub-contracting logistics services to local players to maintain a high-profit margin and low overhead costs. For instance, in November 2019, Universal Logistics Holdings, Inc. announced the acquisition of Roadrunner Intermodal Services, LLC stretching their logistics capabilities across North America. In August 2019, DSV acquired Panalpina Welttransport Holding AG, a Switzerland based logistics group. The company is leveraging Panalpina's proficiency in the freight forwarding and brokerage service and giving a fierce competition to the leading logistics companies. Some of the prominent players in the third-party logistics market include:

  • BDP International

  • Burris Logistics

  • C.H. Robinson Worldwide (CHRW) Inc.

  • CEVA Logistics

  • DSV Panalpina A/S

  • DB Schenker Logistics

  • FedEx Corporation

  • J.B. Hunt Transport Services, Inc.

  • Kuehne + Nagel International AG

  • Nippon Express Co., Ltd.

  • UPS Supply Chain Solutions, Inc.

  • XPO Logistics, Inc

  • Yusen Logistics Co. Ltd. (Nippon Yusen)

Third-party Logistics Market Report Scope

Report Attribute


Market size value in 2020

USD 889.01 billion

Revenue forecast in 2027

USD 1.56 trillion

Growth Rate

CAGR of 8.3% from 2020 to 2027

Base year for estimation


Historical data

2016 - 2018

Forecast period

2020 - 2027

Quantitative units

Revenue in USD billion and CAGR from 2020 to 2027

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Service, transport, end use, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; U.K.; Germany; France; Poland; Hungary; China; India; Japan; Thailand; Vietnam; South Korea; Australia; Brazil; Mexico

Key companies profiled

DB Schenker Logistics; C.H. Robinson Worldwide Inc.; DHL International GmbH; FedEx Corporation; Kuehne + Nagel International AG; Nippon Express Co., Ltd.; UPS Supply Chain Solutions Inc.

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Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global third-party logistics market report on the basis of service, transport, end use, and region:

  • Service Outlook (Revenue, USD Billion, 2016 - 2027)

    • Dedicated Contract Carriage (DCC)/ Freight forwarding

    • Domestic Transportation Management (DTM)

    • International Transportation Management (ITM)

    • Warehousing & Distribution (W&D)

    • Value-Added Logistics Services (VALs)

  • Transport Outlook (Revenue, USD Billion, 2016 - 2027)

    • Roadways

    • Railways

    • Waterways

    • Airways

  • End-use Outlook (Revenue, USD Billion, 2016 - 2027)

    • Manufacturing

    • Retail

    • Healthcare

    • Automotive

    • Others

  • Regional Outlook (Revenue, USD Billion, 2016 - 2027)

    • North America

      • The U.S.

      • Canada

    • Europe

      • Germany

      • The U.K.

      • France

      • Poland

      • Hungary

    • Asia Pacific

      • China

      • India

      • Japan

      • Australia

      • Thailand

      • Vietnam

      • South Korea

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa

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