Global Industry Analysts (GIA) has projected the global third party logistics (3PL) market to reach $1.35 trillion by the year 2018, driven by globalization of trade and the ever-increasing need for freight capacity and effective logistics management.
According to GIA, a publisher of off-the-shelf market research, logistics efforts will continue to grow more complex as trade volume increases, technology advances are adopted, and customers make more demands around specialized services and requirements, which will further the need for logistics outsourcing partners.
Since 3PLs allow customers to outsource their supply chain management, either in whole or part, it can be viewed as an effective strategy for companies looking to improve their competitiveness, GIA said.
The report views 3PL outsourcing as part of the path to a resurgence in the worldwide economy, as it provides benefits like cost savings and increased operational efficiency in both traditional roles, as well as new services like supply chain control, customer collaboration, and IT integration.
When looking at the market historically, the report noted 3PLs saw a robust growth until 2008, but were hit hard in the steep decline that swept away much of the economic gains across all industries. While the economy faltered again during the first half of 2011 due to oil supply concerns and the natural disasters in Japan, the following recovery has put 3PLs in a good place to respond to increasing industrial activity.
Emerging markets, particularly China, Brazil, India, and Mexico, are witnessing increased 3PL activity mostly due to the sluggish growth in industrialized markets, the report said. It attributed this growth to the steady economic improvements and rising domestic consumption across emerging markets.
More details from the report can be found here
. - Geoff Whiting