3PL Market Overview
The 3PL Market Size is expected to reach USD 168.35 Billion by 2033. The 3PL industry size accounted for USD 123.36 Billion in 2023 and is expected to expand at a compound annual growth rate (CAGR) of 4.41% from 2023 to 2033. FMCGs or “Fast Moving Consumer Goods” are the largest group of consumer goods, covering a wide range of different product categories such as health and beauty, home care, personal care, food and drink, and many other necessities. 3PL or third-party logistics providers are a good option for start-up companies in the FMCG markets with large volumes. 3PLs are the third-party companies that offer supply chain management and the services required to secure their operations. The services provided by 3PLs are transport, packing, storage, consolidation, and other services that are needed to increase efficiency. For companies with high demand but low capital, 3PLs provide a good option for them. These companies can be small companies or large companies.
Global 3PL Market Synopsis
COVID-19 Impact Analysis
The 3PL in the FMCG market was severely affected by the COVID-19 pandemic. With the threat of COVID-19, many countries were left with no choice but to halt trading with one another in a bid to save themselves. This has caused disruptions in the supply chain and reduced supplies of goods that are needed. In addition, many countries have imposed a nationwide shutdown for non-essential shopping of all retail outlets. This has caused a setback for the FMCG logistics industry as transportation of these products is not needed anymore. The food and beverage industry has also been severely impacted by the global pandemic. Offline dining venues such as restaurants and cafes have been shut down due to the pandemic, while online orders for food also decreased.
3PL Market Dynamics
The major factors that have impacted the growth of 3PL are as follows:
Drivers:
Ø Increasing Priority of Cost Optimization in Supply Chain to Drive the Market Growth
FMCG is a highly cost-sensitive industry, so the slightest variation in operations can have a significant impact on profits. A 3PL service partner will save the company money on outsourcing logistics, storage, and transportation. This means the company can focus on its core competencies and increase the profit margins by cutting costs with an expert company. In addition, 3PL service providers offer expert input and customized solutions tailored to the company’s needs. Alongside this, they cost less in comparison to an in-house team and also provide invaluable insights into the products’ supply chain.
Restraint:
- Limited Control of the Manufacturers and Retailers on the Logistics Service to Hinder the Market Growth
Outsourcing to third-party logistics providers means a manufacturing or retailing company has to trust that the 3PL provider can provide competency, honesty, and reliability. This means the company doesn’t have full control of its supply chain. Outsourcing to third-party logistics (3PL) can lead to a breach of confidentiality due to the lack of transparency, where things such as customers’ data could be at risk of confidential information interacting with other businesses. Hence, a lack of control of manufacturers and retailers on logistics services is expected to hamper the growth of this market.
Opportunity:
⮚ Markets’ growing ability to Leverage AI and the Emerging Tech to create huge Potential
3PL Service Providers are changing the way they deliver services by adapting to the changing requirements of their FMCG customers. These changes involve implementing new technologies like AI and emerging tech that streamline operations and bring efficiency. 3PL providers offer a range of different benefits for FMCG brands. For example, 3PLs can provide tech-enabled solutions including temperature-controlled supply chains or data-driven management solutions such as inventory and sales fulfillment, stock updates, and so on. AI-enabled and value-driven logistics partners are going to help drive growth in the FMCG sector more than ever before.
3PL Segment Overview
By Product Type
Based on the Product Type, the 3PL in the FMCGs market is segmented based on Distribution and Retail. The Distribution segment is anticipated to account for the large market share. The Distribution segment is dominating due to the large companies in this sector having global awareness, partnerships with key clients, high cost-effectiveness, and flexibility. The large players in this segment are DHL, C&S Logistics, UPS, and others. They’re rapidly expanding into the retail sector by providing services such as drop-shipping, home-delivery, and shipping of different types of products.
By Capacity
Based on Application, the global 3PL in the FMCG market has been divided into Food and Beverages, Personal Care, and Household Care. The Food and Beverage segment is expected to hold the largest market share. The food and beverage segment accounts for the majority of applications for the FMCG logistics market due to the growth in the sales of packaged food products and staple food products. The increase in hectic lifestyles has caused a demand for ready-made food products as people are having less time to cook at home. Furthermore, the population growth and rise in the number of retail stores will increase the demand for 3PLs in the market.
Global 3PL Market Regional Analysis
Based on region, the global 3PL market has been divided into North America, Europe, Asia-Pacific, the Middle East & Africa, and Latin America. North America is projected to dominate the use of the 3PL market followed by the Asia-Pacific and Europe regions.
North America Market
North America dominates the 3PL in the FMCG market, with a diverse coastline being one of its attributes. In addition, it also has many cruising destinations. The U.S. ranks at the top in this region, as there are many important logistical and supply chain locations situated there. The resurgence of the logistics industry in the U.S. can be seen after the strict lockdown due to the COVID-19 pandemic subsided.
Asia-Pacific Market
The Asia Pacific region is expected to experience a very strong CAGR over the forecast period. The sector has been growing steadily in popularity mainly because both the middle-income class and production costs are declining. The projection of rapid growth in the higher-end services sector in China and emerging markets suggests a shift towards contract logistics companies with the latest high-tech equipment. The current demand for items such as more expensive consumer goods and perishable food is predicted to skyrocket, which will require new innovative logistical solutions.
Competitive Landscape
The global 3PL market is highly competitive, with numerous players offering a wide range of software solutions. The competitive landscape is characterized by the presence of established companies, as well as emerging startups and niche players. To increase their market position and attract a wide consumer base, the businesses are employing various strategies, such as product launches, and strategic alliances.
Prominent Players:
- CEVA Logistics
- ROBINSON
- Deutsche Bahn
- Deutsche Post DHL Group
- Kuehne + Nagel
- Nippon Express
Key Development
In July 2021, OMLog, an Italian-based third-party logistics provider for luxury fashion products, signed a 607,279 sq ft warehouse at Bridge Point 78 in New Jersey. The Township where the warehouse is located in between Phillipsburg and Lopatcong.
Scope of the Report
Global 3PL Market, by Product
- Distribution
- Retail
Global 3PL Market, by Application
- Food and Beverages
- Personal Care
Household Care
Global 3PL Market, by Region
- North America
- US
- Canada
- Mexico
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Benelux
- Nordic
- Rest of Europe
- Asia Pacific
- China
- Japan
- South Korea
- Indonesia
- Austalia
- Malaysia
- India
- Rest of Asia Pacific
- South America
- Brazil
- Argentina
- Rest of South America
- Middle East & Africa
- Saudi Arabia
- UAE
- Egypt
- South Africa
- Rest of Middle East & Africa
| Parameters | Indicators |
|---|---|
| Market Size | 2033: USD 168.35Billion |
| CAGR (2023-2033) | 4.41% |
| Base year | 2022 |
| Forecast Period | 2023-2033 |
| Historical Data | 2021 (2017 to 2020 On Demand) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Key Segmentations | Product Type, Capacity |
| Geographies Covered | North America, Europe, Asia-Pacific, South America, Middle East, Africa |
| Key Vendors | CEVA Logistics, H. ROBINSON, Deutsche Bahn, Deutsche Post DHL Group, Kuehne + Nagel, Nippon Express. |
| Key Market Opportunities | · Markets’ growing ability to Leverage AI and the Emerging Tech to create huge Potential |
| Key Market Drivers | · Increasing Priority of Cost Optimization in Supply Chain to Drive the Market Growth |
REPORT CONTENT BRIEF:
- High-level analysis of the current and future 3PL market trends and opportunities
- Detailed analysis of current market drivers, restraining factors, and opportunities in the future
- 3PL market historical market size for the year 2021, and forecast from 2023 to 2033
- 3PL market share analysis at each product level
- Competitor analysis with detailed insight into its product segment, Government & Defense strength, and strategies adopted.
- Identifies key strategies adopted including product launches and developments, mergers and acquisitions, joint ventures, collaborations, and partnerships as well as funding taken and investment done, among others.
- To identify and understand the various factors involved in the global 3PL market affected by the pandemic
- To provide a detailed insight into the major companies operating in the market. The profiling will include the Government & Defense health of the company’s past 2-3 years with segmental and regional revenue breakup, product offering, recent developments, SWOT analysis, and key strategies.
