The global third-party logistics market could exceed $1.1 trillion dollars in the next five years as e-commerce and outsourcing fuels its growth, according to a report by Armstrong & Associates.
In 2016, the global 3PL market brought in $802 billion in revenue-- a number dwarfed by the total global logistics costs, which hit $8.2 trillion and could surpass $11.1 trillion by 2022.
The Asia Pacific region came in as the largest logistics market, making up 39% of the total logistics costs and 38% of the 3PL market’s revenues.
In the past, logistics growth in the Asia Pacific region was primarily driven by outsourcing and offshoring manufacturing from wealthier nations. However, in recent years this growth has been driven by domestic consumption and demand for products within the region, according to the report. Specifically, China’s Belt and Road Initiative has driven infrastructure spending across Asia.
By country, China alone is the largest spender on logistics at more than $1.7 trillion, followed by Europe and the U.S. at over $1.5 trillion.
E-commerce is a major driver of growth in the market. Growth in revenue from e-commerce alone is outpacing the overall marke,t but still makes up just 5.1% of the market. This percentage is expected to increase to 7.2% of total revenues by 2020.
These figures were projected in A&A’s global logistics report “Global and Regional Infrastructure, Logistics Costs, and Third Party Logistics Market Trends and Analysis,” which covers the years of 2010-2022.
\The report also covers: infrastructure’s role with a focus on Brazil, India, and China; Fortune 500 Global 3PL revenues and growth by industry; e-commerce logistics costs, 3PL revenues, and growth rates; 3PL market segment revenues by country and region; and logistics spend by country and region and by mode and function. Global “Top 3PL” lists are also included.
The complete report, which is complimentary for a limited time, and other A&A market research can be found online here.