US 3PL MARKET - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The US 3PL market is segmented by Type (Domestic Transportation Management, International Transportation Management, and Value-added Warehousing and Distribution), and End-Users.

US 3PL Market Snapshot

US 3PL Market
Study Period: 2016 - 2026
Base Year: 2020
CAGR: >3.5 %

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Market Overview

The US market is one of the biggest contributors to the 3PL market in the North America region and is expected to grow at a CAGR of over 3.5% during the forecast period of 2020-2025. The growth in the market is driven by the increasing demand for integrated services, the advanced implementation of IoT and logistics automation. The retail industry is the key end-user of the 3PL services covering about 30% of the total market share.

Scope of the Report

A comprehensive background analysis of the US 3PL Market, covering the current market trends, restraints, technological updates and detailed information on the market concentration through the various segments and competitive landscape of the industry.

By Services
Domestic Transportation Management
International Transportation Management
Value-added Warehousing and Distribution
By End-User
Aerospace
Automotive
Consumer & Retail
Energy
Healthcare
Manufacturing
Technology
Other End Users

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Key Market Trends

E-commerce Driving the 3PL Market

The US e-retail registered at a CAGR of 11.8% over the period of 2014 to 2019. With the increasing penetration of e-commerce in the US market, the consumers are demanding customized shipping along with real-time visibility of the shipments. These demands are driving the 3PL service providers to focus on providing overall network optimization and create an agile supply chain through innovation and optimization for greater visibility.

Even while e-commerce has been a core demand driver for sophisticated and high-end logistics services from 3PLs, the market is disrupting fast. XPO Logistics, America’s leading contract logistics and 3PL service provider is expected to have lost around USD 500 million worth of business since Amazon has been working on internalizing it’s supply chain functions. At the other end – like Amazon, Shopify a leading e-commerce marketplace acquired 6 River Systems. 6 River Systems is a provider of AI-enabled fulfilment automation solutions – focused on effective picking, sorting, quicker turn-around time and throughput. 6 River Systems lists XPO Logistics and other 3PL companies as clients. Such scenarios indicate the level of sophistication and ongoing disruptions in the fast-changing market. Even while e-commerce is expected to be a core demand driver for 3PL services, retailers and online marketplaces such as Amazon and Shopify would also require specialized 3PL support (given their scale of business). Hence 3PL companies are expected to upgrade technology and acquire disruptive solution providers – so that outsourcing requirements of large and key customers can be fulfilled and required end-customer satisfaction can be achieved.

US 3PL Market

Increase in Demand for Warehousing Space

The rising demand from key areas such as automotive, manufacturing, retail, technology, healthcare and construction is expected to create strong demand for the warehousing space in the coming years. The manufacturing companies are demanding for outsourcing warehousing services to aid their production and operational expansions. In addition to this, considering the advantages of outsourcing in terms of enhanced operational efficiency and cost savings, shippers are increasingly outsourcing the logistics portion of their activities to warehouse service suppliers in order to meet the increasing demand for fast delivery. This also allows them to concentrate on their core competencies. Moreover, with the growing popularity of frozen food, the demand for refrigerated storage and warehousing has also increased. 

Many logistic service providers and retailers have started establishing dedicated warehousing space for their activities in the market. Among which, UPS Supply Chain, as on October 2019, announced 1.3 million sq. feet of total distribution space for its dedicated healthcare-dedicated warehouse and distribution network in the US market increasing the total healthcare warehouse and distribution space to 4 million sq. feet by the end of 2020.

China Manufacturers Alliance L.L.C. (CMA)/Double Coin Tires has opened warehouses in Rancho Cucamonga and Riverside (US) to boost the capacity for truck/bus and OTR tires in the coming years. The addition of these facilities has expanded the company's warehousing footprint to approximately 338,000 sq. feet adding extra capacity for around 225,000 units.

US 3PL Market

Competitive Landscape

The market is relatively fragmented with a large number of local and international players, including CH Robinson, XPO Logistics, UPS Supply Chain and JB Hunt as the major players. Fragmentation in the market is expected decrease with companies in the space actively merging and consolidating to get the benefits of economies of scale.

Among recent developments, in December 2019, Transportation Insight a multi-modal, lead logistics provider, announced the acquisition of FreightPros - established freight brokerage company with deep expertise in LTL under the strategy of buying well-positioned transportation and logistics businesses with a strong base of clients that have future growth opportunities. Big players like CH Robinson announced the acquisition of Prime Distribution Services (a leading provider of retail consolidation and value-added warehouse services in North America). In December 2019, J.B. Hunt announced the acquisition of RDI Last Mile Co., increasing the company's final mile services division to 104 locations and more than 3.1 million sq. feet of warehousing space.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Analysis Methodology

    2. 2.2 Research Phases

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS AND INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Market Dynamics

      1. 4.2.1 Drivers

      2. 4.2.2 Restraints

      3. 4.2.3 Opportunities

    3. 4.3 Value Chain / Supply Chain Analysis

    4. 4.4 Industry Policies and Regulations

    5. 4.5 Demand From Other Segments, such as CEP, Last Mile Delivery, Cold Chain Logistics Etc.

    6. 4.6 Technological Developments in the Logistics Sector

    7. 4.7 Industry Attractiveness - Porter's Five Forces Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Services

      1. 5.1.1 Domestic Transportation Management

      2. 5.1.2 International Transportation Management

      3. 5.1.3 Value-added Warehousing and Distribution

    2. 5.2 By End-User

      1. 5.2.1 Aerospace

      2. 5.2.2 Automotive

      3. 5.2.3 Consumer & Retail

      4. 5.2.4 Energy

      5. 5.2.5 Healthcare

      6. 5.2.6 Manufacturing

      7. 5.2.7 Technology

      8. 5.2.8 Other End Users

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 C.H. Robinson

      2. 6.2.2 Coyote Logistics

      3. 6.2.3 D.B. Schenker

      4. 6.2.4 DHL Supply Chain

      5. 6.2.5 Hub Group

      6. 6.2.6 J.B. Hunt

      7. 6.2.7 Kuehne + Nagel

      8. 6.2.8 Ryder Supply Chain Solutions

      9. 6.2.9 UPS Supply Chain Solutions

      10. 6.2.10 XPO Logistics*

    3. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

    1. 7.1 Recent Mergers and Acquisitions

  8. 8. FUTURE OF US THIRD PARTY LOGISTICS MARKET

  9. 9. DISCLAIMER

**Subject to Availability

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Frequently Asked Questions

The US 3PL MARKET market is studied from 2016 - 2026.

The US 3PL MARKET is growing at a CAGR of >3.5% over the next 5 years.

C.H. Robinson Worldwide, Inc., J.B. Hunt Transport, Inc., DB Schenker, XPO Logistics, Inc., UPS are the major companies operating in US 3PL MARKET.

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