PUBLISHER: Allied Market Research | PRODUCT CODE: 1513402
PUBLISHER: Allied Market Research | PRODUCT CODE: 1513402
The global logistics business outsourcing market was valued at $1.3 trillion in 2022, and is projected to reach $2.1 trillion by 2032, growing at a CAGR of 5.7% from 2023 to 2032.
Logistics management focuses on the efficiency and effective management of daily activities concerning the production of finished goods and services of the company. This type of management forms a part of the supply chain management; and plans, implements, & controls the efficient, effective forward, reverse flow, and storage of goods. Logistics mainly comprises various services such as Third-Party Logistics (3PL), Fourth-Party Logistics (4PL), inbound logistics, outbound logistics, reverse logistics, green logistics, construction logistics, digital logistics, military logistics, and other logistics services.
Outsourcing transportation management involves contracting with 3PL providers to handle freight forwarding, carrier selection, routing optimization, shipment tracking, and freight auditing. This allows businesses to streamline their transportation operations and leverage the expertise of logistics specialists. Outsourcing warehousing and distribution services involves utilizing third-party warehouse facilities and fulfilment centers to store inventory, manage inventory levels, pick and pack orders, and fulfil customer shipments. This helps businesses optimize their inventory management and reduce logistics costs.
Logistics outsourcing companies assist businesses in optimizing inventory levels, implementing just-in-time (JIT) practices, and managing stock replenishment. This ensures efficient inventory utilization while minimizing carrying costs and stockouts. Outsourcing order fulfillment and e-commerce logistics involves handling online orders, managing returns, and ensuring timely delivery to customers. This is particularly relevant in the context of growing e-commerce activities and the need for fast, reliable shipping services.
The factors, such as growth in e-commerce industry coupled with rise in reverse l logistics operations and rise in trade related agreements, fuel the logistics outsourcing market growth. In addition, the rise of tech-driven logistics services and growth in adoption of IoT-enabled connected devices are also expected to drive the market growth. However, lack of control of manufacturers on logistics service, poor infrastructure, and higher logistics costs hinder the market growth. Furthermore, the emergence of last mile deliveries, logistics automation, and cost cutting & lead time reduction due to adoption of multi-modal system are some of the factors that are anticipated to boost the market growth.
E-commerce refers to the buying and selling of goods by using internet. Third-party logistics service providers encompass shipping of products to consumers. In addition, the e-commerce industry utilizes logistics service to manage and oversee the supply chain of e-commerce companies, which allows these companies to focus on marketing and other business operations. Thus, there has been a rise in adoption of logistics services at a significant rate due to numerous benefits provided by logistics to the e-commerce industry, which has driven the growth of the logistics market. For instance, according to the latest report by the trade and development body (UNCTAD) of the UN released on April 2020, e-commerce sales hit $25.6 trillion globally in 2018, which was equivalent to 30% of the gross domestic product (GDP). The value of global B2B e-commerce in 2018 was $21 trillion, representing 83% of all e-commerce, whereas B2C e-commerce was valued at $4.4 trillion. The growth is attributed to fast growth in consumers and cross-border purchases. According to the report, more than 1.4 billion people shopped online in 2018 while the U.S., China, and Japan dominate e-commerce sales to consumers.
The logistics outsourcing market is segmented on the basis of mode of transport, end user, and region. On the basis of mode of transport, the market is divided into ocean carriers, railways, roadways, and air freight. On the basis of end user, it is divided into pharmaceuticals, automotive, chemicals, food & beverages, and others. Region-wise, it is studied across North America, Europe, Asia-Pacific, and LAMEA.
Key players covered in the report include United Parcel Service of America, Inc., XPO Logistics, Inc., DHL International GmbH, Kuehne + Nagel International AG, FedEx Corporation, Deutsche Bahn AG, Nippon Express Co., Ltd., DSV A/S, SNCF Group, A.P. Moller - Maersk
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