Global Automotive 3PL Market Size

Automotive 3PL Market Analysis

The Global Automotive 3PL Market is expected to register a CAGR of 7% within the next 5 years. The market is set to gain traction from the increasing adoption of third-party logistics (3PL) for reducing operating costs and investments.

• The outbreak of the COVID-19 pandemic across the globe compelled car manufacturers to focus more on localizing their production. This was because the heavy dependence on a single region put them at high risk. China and Taiwan are the primary production hubs of semiconductors used in vehicles. Since the third quarter of 2020, the industry was facing shortages of raw materials, such as steel, and this was why OEMs were striving to surge the demand to replenish their inventories. This resulted in automakers' shift towards changing sourcing strategies, which, in turn, was believed to affect the automotive logistics industry.
• One of the critical reasons propelling the growth of the automotive third-party logistics market is the demand for these third-party logistics from the automotive sector to reduce inventory and supply chain expenses at each transaction along with their customers in the field. The need for the logistics provider is growing as the automotive industry seeks one-stop services for outsourcing services like inventory control, inbound material flow management, container management, kitting, packaging, cross-docking, reverse logistics, warehousing, transportation, and just-in-time delivery. The growth of e-commerce and new technologies impact the market for third-party automobile logistics.
• The need for expertise to handle complex supply chain activities like international documentation procedures and the growing emphasis on adaptability and responsiveness as a result of the modern supply chain becoming more customer-centric drive the growth of the automotive third-party logistics market. Additionally, the need for third-party automotive logistics is positively impacted by rising internet and mobile usage and an increase in the number of warehouses. Further, during the forecast period, the automotive third-party logistics market participants would benefit from changes in the retail business model and technological innovation.
• Asia Oceania is the largest market for domestic 3PL due to large-scale automobile production in China, Japan, and India. Domestic logistics include the services required to transport automotive vehicles and goods within a country and region. The automotive third-party logistics industry has grown substantially, particularly in emerging economies such as China and India. The area has witnessed growth in automotive production due to low wages, availability of raw materials, increased demand for vehicles, and the presence of major OEMs such as Toyota (Japan), Maruti Suzuki (India), and SAIC (China).