Market Trends of United States 3PL Industry
This section covers the major market trends shaping the US 3PL Market according to our research experts:
E-commerce Driving the 3PL Market
- With the increasing penetration of e-commerce in the United States market, 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 creating 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.
- Shopify, a leading e-commerce marketplace, acquired 6 River Systems. 6 River Systems is a provider of AI-enabled fulfillment 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.
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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.
- 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 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 spaces for their activities in the market.
- In 2020, China Manufacturers Alliance LLC (CMA)/Double Coin Tires 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. ft, adding extra capacity for around 225,000 units.
