Explore the Opportunities for the Rise of Next-Generation Third-Party Logistics (3PL) Services
27 Sep 2022
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The term third-party logistics (3PL) is referred to the function by which manufacturers outsource activities related to logistics, distribution, and custom clearance. 3PL is beneficial for both the organization and the consumer. Technological advancements along with the growing need of enterprises across the world to outsource freight service has paved the way for huge demand for next-generation third-party logistics.
According to a report published by Allied Market Research, the global third-part logistics (3PL) market size is anticipated to reach $1789.9 billion with a considerable CAGR from 2020 to 2027. The Asia-Pacific region is currently dominating the market with the highest market share. the LAMEA region, on the other hand, is expected to witness the highest growth rate. A significant surge in trading activities due to globalization is the one of the major factor to drive the growth of the market.
Moreover, the outbreak of the COVID-19 pandemic led to boost the need for next-generation 3PL in more than one way. The implementation of global lockdown and stringent restrictions to import & export activities resulted to severe disruptions in the supply chain across the world in 2020, due to which, manufacturers struggled to meet high demands for goods. Companies had to fast track their efforts to build advanced supply chains that are efficient, customer-centric, and more transparent. Services including warehousing & inventory management, transportation management, distribution, and more have been handled by 3PL providers.
In addition, the global e-commerce industry has evolved to a great extent during the pandemic. As all the retail shops, supermarkets, and hypermarkets were temporarily closed, people started to order products online. In such a scenario, apart from big e-commerce retailers such as Amazon and Flipkart, other small sized e-commerce retailers who can hardly manage to pay for their in-house logistic services needed solutions from 3PL providers.
Third-party logistics companies use technologies such as Artificial Intelligence (AI), cloud computing, Internet of Things (IoT), robotics, Global Positioning System (GPS), drones, Radio Frequency Identification (RFID), and others in order to reduce the manual labor in the supply chain. Cloud computing technology has solved some biggest challenges of the 3PL ventures such as improving efficiency and customer service while also reducing the transportation cost. Advanced solutions such as delivery through autonomous vehicles, drone deliveries, crowdsourced delivery, pickup points, and more are also playing an essential role for the rapid development of logistics industry. Here, it is worth mentioning that the logistics industry is expected to grow exponentially in the upcoming years, which in turn, is going to shower enormous growth opportunities for the growth of the global third-party logistics market.
Authors Bio- Koyel Ghosh is a blogger with a strong passion and enjoys writing in miscellaneous domains, as she believes it lets her explore a wide variety of niches. She has an innate interest in creativity and enjoys experimenting with different writing styles. A writer who never stops imagining, she has been serving the corporate industry for the last five years.