United States 3PL - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The United States 3PL Market size is estimated at USD 238.20 billion in 2024, and is expected to reach USD 281.21 billion by 2029, growing at a CAGR of 3.38% during the forecast period (2024-2029).

COVID-19 has transformed businesses across the world, with greater attention given to supplying chain optimization, growth of 3PL, and meeting essential and non-essential delivery challenges. Building supply chains more resistant to shocks like COVID-19 requires a blended approach by shippers to localized and global sourcing. With the implementation of the lockdown, the transportation sector, upon which supply-chain activities are dependent, has remained partially closed. Consequently, there were constraints to the smooth functioning of the supply chains, and this has had an adverse impact on global business and industrial activities. The shipping industry, which accounts for about 90% of trade activities, was impacted by the pandemic.

The 3PL market in the United States is driven by the increasing level of cross-border trade. The cost benefits of using 3PL are anticipated to boost the growth of the 3PL market. Consequently, 3PLs are going through a digital transformation and are investing in end-to-end solutions and end-to-end visibility to meet growing customer demand.

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

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

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

US (3PL) Third-Party Logistics Market Trends

E-commerce Driving the 3PL Market

• With the increasing penetration of e-commerce in the United States market, consumers are demanding customized shipping along with real-time visibility of the shipments. These demands are driving the 3PL service providers to focus on providing overall network optimization and creating an agile supply chain through innovation and optimization for greater visibility.
• Even while e-commerce has been a core demand driver for sophisticated and high-end logistics services from 3PLs, the market is disrupting fast.
• Shopify, a leading e-commerce marketplace, acquired 6 River Systems. 6 River Systems is a provider of AI-enabled fulfillment automation solutions focused on effective picking, sorting, quicker turn-around time, and throughput. 6 River Systems lists XPO Logistics and other 3PL companies as clients. Such scenarios indicate the level of sophistication and ongoing disruptions in the fast-changing market.
• Even while e-commerce is expected to be a core demand driver for 3PL services, retailers and online marketplaces such as Amazon and Shopify would also require specialized 3PL support (given their scale of business).
• Hence, 3PL companies are expected to upgrade technology and acquire disruptive solution providers - so that outsourcing requirements of large and key customers can be fulfilled and required end-customer satisfaction can be achieved.

Increase in Demand for Warehousing Space

• The rising demand from key areas such as automotive, manufacturing, retail, technology, healthcare, and construction is expected to create strong demand for the warehousing space in the coming years.
• The manufacturing companies are demanding for outsourcing warehousing services to aid their production and operational expansions.
• Considering the advantages of outsourcing in terms of enhanced operational efficiency and cost savings, shippers are increasingly outsourcing the logistics portion of their activities to warehouse service suppliers to meet the increasing demand for fast delivery.
• This also allows them to concentrate on their core competencies. Moreover, with the growing popularity of frozen food, the demand for refrigerated storage and warehousing has also increased.
• Many logistic service providers and retailers have started establishing dedicated warehousing spaces for their activities in the market.
• In 2020, China Manufacturers Alliance LLC (CMA)/Double Coin Tires opened warehouses in Rancho Cucamonga and Riverside (US) to boost the capacity for truck/bus and OTR tires in the coming years. The addition of these facilities has expanded the company's warehousing footprint to approximately 338,000 sq. ft, adding extra capacity for around 225,000 units.

US (3PL) Third-Party Logistics Industry Overview

The market is relatively fragmented, with the presence of a large number of local and international players, including CH Robinson, XPO Logistics, UPS Supply Chain, Expeditors, and JB Hunt. Fragmentation in the market is expected to decrease with companies in the space actively merging and consolidating to get the benefits of economies of scale.

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