Automotive 3PL Market: Current Analysis and Forecast (2024-2032)

A 3PL provider is an organization specializing in the delivery of different logistics services and can include anything that entails outsourcing one or multiple aspects of the procurement and supply chain processes. Third-party logistics or 3PL in the automotive industry is well prepared for a wide range of auto parts, and a full-service auto part for automotive sellers. It comprises a warehouse for storing and delivering parts such as fenders, tires, and seats among others through our transport wagons, it also contains lighting systems for large vehicles such as engines. The automotive 3PL market as a global supply chain market includes various levels of supply chain management services.

The Automotive 3PL Market is expected to grow at a steady rate of around 8.38%, owing to the expanding automotive supply chain issues and the requirement for Automotive 3PL. For example, in 2024, DHL Supply Chain, one of the largest service providers globally is increasing capacities with a new plant in Leipzig/Halle. The new, 34,000-square-meter complex will increase the existing capacities of the company. The DHL Supply Chain provides services to a wide range of clients within the industrial and services sectors and can enjoy the excellent transport linkages of the area for both national and global distribution. Further, the increase in the adoption of electric vehicles and the Globally Adopted Just in Time (JIT) inventory management manufacturing approach are key drivers that are compelling automotive manufacturers to seek the services of third-party logistics providers which include inventory management, warehousing, and transportation services for automotive products hence driving the Automotive 3PL market.

Based on the type, the market is bifurcated into finished vehicles and auto components. The auto component segment held a significant share of the market in the year 2023 owing to the volume and frequency. The auto parts are manufactured in different geographies due to cheap labor costs and then shipped to various parts. This has further improved the vehicle assembling market and propels the demand for the automotive 3PL market. Additionally, the aftermarket segment is quite bigger than the OEM segment, which has boosted the logistics and supply chain. The average life of the vehicle is considered around 15 years; therefore, the frequency of changing parts is greater than just finished vehicles. Moreover, some of the auto components need precise packaging, handling, and transportation which increases the services and the value of 3PL.

Based on the services, the market is segmented into transportation, warehousing, distribution, inventory management, and others. The transportation segment is expected to experience significant growth in the forecast period owing to core functionality, as it moves raw materials, goods, auto components, and finished products from one place to another. This is happening due to increased globalization, as it allows components to be manufactured components in one part of the world and sold to another part of the world. This requires a smooth and efficient transportation system and hence, the services for the automotive 3PL increase. Moreover, the automobile and transportation industry are booming due to the emergence of electric vehicles. Major countries around the world are accepting these new energy vehicles and providing subsidies for greater adoption, which has boosted the demand for automotive 3 PL services. Developing countries such as India, and Indonesia may have manufacturing units for these vehicles, but mainly they are importing from other nations. For instance, in 2023, according to the report by Volza, India imported 12,967 shipments of electric vehicles from Mar 2023 to Feb 2024 (TTM). Companies operating in the market are expanding their logistic services to fulfill the market demand. For instance, in April 2024, Kuehne+Nagel expanded its spare parts logistics for BMW. The company is one of the leading logistic providers and now manages a 170,000m2 spare parts fulfillment and delivery center in Wallersdorf, Germany.

For a better understanding of the market adoption of Automotive 3PL, the market is analyzed based on its worldwide presence in countries such as North America (The US, Canada, and the Rest of North America), Europe (Germany, The UK, France, Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. The Asia Pacific region held the majority share of the market in the year 2023 due to various factors such as the region being the emerging manufacturing hub. Factors such as the presence of the largest manufacturing companies due to cheap labor costs, and growing innovation parallelly supported the market growth. Countries such as China, India, Indonesia, and South Korea produce a wide range of vehicle components driving demand for 3PL services. Government support such as India's PLI Scheme for automobiles and auto components which comes under the Department of Heavy Industries has boosted the production and consequently, 3PL demand. Japan is one of the most technologically advanced countries in terms of the automotive industry with the presence number of global automotive players such as Honda, Toyota, Nissan, and others. Toyota's hydrogen fuel cell electric vehicle "Mirai" has created new opportunities and challenges for the 3PL providers. This will allow service providers to come up with unique solutions to further facilitate market growth. Moreover, according to the report published by JAMA (Japan Automobile Manufacturers Association, Inc.), with an increase in manufacturing, the country's automotive shipments reached 63 trillion Yen in 2022, up 11.4% from the previous year. Moreover, the country has increased its exports to 4,422,682 units in 2023. Motor vehicle exports increased in 2023 from the previous year to North America (1.72 million units), Europe (775,100 units), the Middle East (490,000 units), Oceania (469,000 units), and Latin America (277,000 units), but decreased to Asia (575,000 units) and Africa (107,000 units). This has further boosted the demand for 3PL services.

Some of the major players operating in the market include DHL Supply Chain, Kuehne+Nagel, DB SCHENKER, XPO, Inc., C.H. Robinson Worldwide, Inc., CEVA Logistics, United Parcel Service of America, Inc., Ryder System, Inc., Penske, and NIPPON EXPRESS HOLDINGS.