Third-party Logistics Market Category Intelligence
Global third-party logistics market is expected to witness sustainable growth (CAGR of 8%) from 2020 to 2025 as manufacturers and end-use industries in emerging countries lack the internal control required for addressing logistics challenges.
The continuous shift to e-commerce due to pandemic have fueled the need of robotics and automation solution across third-party logistics services for global organizations. However, these automation integrations take months largely because the software that operates them must be manually configured to work with an individual warehouse management system. DHL in collaboration with Blue Yonder is installing robotics solution, programmed with the ability to speak to different systems, removing the need for software configuration at each warehouse. This robotics hub would operate as middleware between the warehouse management system and the fleet management system. It standardizes the data and tasks that flow between the two systems such as, shelf location of a retail product, the quantity of a product to pick, etc.
Similarly, C.H. Robinson integrated 19 transportation management systems (TMS) and enterprise resource planning (ERP) systems into the company’s global multimodal transportation management system, Navisphere. This integration offers access to real-time pricing and capacity assurance and nearly eliminates the time required to get market quotes and book loads, making this a virtually instantaneous process. This integration offers access to real-time pricing and capacity assurance by eliminating the time required to get market quotes and book loads. This automation also provides greater flexibility and efficiencies for shippers at a critical time when they are faced with changing customer buying habits and supply chain disruptions such as COVID-19.
Third-party Logistics Market Category Intelligence Highlights
· 3PL suppliers are collaborating with regional players to benefit from their knowledge of the local market, and maintain high-profit margins, low overhead costs, and their overall competitiveness in the market
· The Third-party Logistics market features a highly fragmented competitive landscape and several small players are entering the market
· Suppliers widely prefer approved provider operating models to reduce risks and improve the potential for value creation
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Third-party Logistics Market Cost Intelligence Highlights
· Growing adoption of Transportation Management System (TMS) is aiding to the growth of the third-party logistics market
· The global 3PL market is highly fragmented and competitive, with many large corporations striking strategic partnerships with mid-sized or small-sized companies to leverage their regional logistics capabilities
· Though cost transparency is lower, cost plus pricing model is offered by the suppliers to maximize profits with less management complexities
· The Chinese government has lowered transportation costs for export and import enterprises temporarily as part of the efforts to ensure that work is resumed as soon as possible and the foreign trade sector remains afloat amid the outbreak of the COVID-19 pandemic
Grand View Research has identified the following key cost components for availing 3PL Services:
· Transportation
o Road
o Sea
o Air
o Rail
· Warehousing
o Order Picking
o Storage
o Shipping
o Receiving
o Others
· Inventory Carrying and Administration
o Insurance
o Freight
o Service Fee
o Storage
o Admin
Warehousing and transportation are the major cost components of a 3PL Services, accounting for more than 70% of the total cost of service.
List of Key Suppliers in the third-party logistics market
· DHL International GmbH
· FedEx Corporation
· Kuehne + Nagel International AG
· United Parcel Service
· C.H. Robinson
· XPO Logistics
· Nippon Express
· DB Schenker
· Sinotrans Limited
· Expeditors
Industry News
· In July 2021, Welspun One Logistics announced an investment of more than USD260 million to develop and lease a portfolio of 7-8 million square feet of grade-A warehousing spaces across India.
· In April 2021, DSV Panalpina A/S announced an agreement to acquire Agility’s Global Integrated Logistics (GIL) business. With this acquisition, Agility will become DSV’s second-largest shareholder, with an 8% ownership in the company.
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About us:
A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of the supply chain which helps in efficient procurement decisions.
Our services include (not limited to):
· Market Intelligence involving - market size and forecast, growth factors, and driving trends
· Price and Cost Intelligence - pricing models adopted for the category, the total cost of ownership
· Supplier Intelligence - rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
· Sourcing / Procurement Intelligence - best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best-suited countries for sourcing to minimize supply chain disruption
Our market/procurement Intelligence reports include in-depth and actionable insights that help clients in understanding the different aspects of the supply chain and take more effective decisions.
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