Logistics Outsourcing Market Is Expected To Reach a Revenue Of USD 1,637.8 Billion By 2033, At 4.7% CAGR: Dimension Market Research

New York, Nov. 11, 2024 (GLOBE NEWSWIRE) -- Market Overview

The Global Logistics Outsourcing Market is projected to reach USD 1,085.5 billion by 2024, and further expand to USD 1,637.8 billion by 2033, growing at a CAGR of 4.7%.

Logistics outsourcing is defined as the process through which firms subcontract certain logistics and supply chain operations like transportation, warehousing, inventory management, order fulfillment, and distribution to other outside parties known as third-party logistics providers (3PLs).

Outsourcing of such services helps organizations carry out as well as manage these services effectively, minimize expenses, and acquire professional support and sophisticated tools. Of these, the third one is particularly important to organizations that need to enhance productivity and flexibility while at the same time scaling up.

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The US Logistics Outsourcing Market

The US Logistics Outsourcing Market is anticipated to reach USD 256.5 billion by 2024, growing to USD 378.5 billion by 2033, with a projected CAGR of 4.4%.

The US Logistics outsourcing market is driven by the need for cost reduction & operational efficiency, along with the increase in e-commerce & demand for faster delivery times. As global supply chains become increasingly complex, more companies are turning to logistics experts to manage cross-border shipments & ensure compliance with international regulations.

Increased use of advanced technologies such as automation, artificial intelligence, and data analytics to boost efficiency are some of the key trends in this market.

Important Insights

• Market Growth: The global Logistics Outsourcing market is projected to grow by USD 506.8 billion, with a CAGR of 4.7%.
• Type Analysis: Supply Chain Management is expected to account for the largest revenue share, by 2024.
• Transportation Analysis: Highway is likely to lead with the highest revenue share based on transportation by 2024.
• End User Analysis: E-commerce is predicted to dominate, accounting for the largest revenue of market revenue by 2024.
• Regional Analysis: Asia Pacific is expected to lead the global logistics outsourcing market with a market share of 35.5% by 2024.

Latest Trends

• Focus on Green Logistics: Businesses are increasingly prioritizing sustainability, bringing Green Logistics to the forefront. This concept aims to reduce the environmental impact of logistics activities, including transportation, warehousing, and packaging.
• Integration of Sustainable Practices: Outsourced logistics providers are adopting sustainable methods across their operations, marking a key trend in the market that focuses on eco-friendly solutions & resource conservation.
• Adoption of Alternative Technologies: Logistics firms are turning to alternative fuels, electric vehicles, & energy-efficient warehouse designs to enhance environmental sustainability and lower carbon emissions.
• Innovative Packaging and Optimization: Providers are developing recyclable packaging and using data analytics for route optimization, helping to minimize waste, reduce fuel consumption, and decrease emissions.

Competitive Landscape

• Market Fragmentation: The logistics outsourcing market is highly competitive, with a mix of large and small players. The market is moderately fragmented but trending towards further fragmentation.
• Collaboration for Advantage: Companies are leveraging partnerships to enhance services and maintain competitiveness.
• Focus on Innovation: Firms prioritize new product launches and innovation to diversify and strengthen their portfolios.
• Mergers and Acquisitions: Mergers and acquisitions are key strategies for expanding capabilities, with major players like Exel Logistics and FedEx leading this approach.

Some of the prominent market players:

• United Parcel Service of America, Inc.
• Exel Logistics
• XPO Logistics, Inc.
• P. Møller - Mærsk A/S
• DHL International GmbH
• Kuehne + Nagel International AG
• Tibbett and Britten
• FedEx Corporation
• Deutsche Bahn AG
• Nippon Express Co., Ltd.
• DSV A/S
• SNCF Group
• Other Key Players

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Logistics Outsourcing Market Scope

Market Analysis
E-commerce is expected to reign as the largest revenue contributor in the logistics outsourcing market Out of all sectors, by 2024 due to the fast-growing segments of online sales and the need for flexible supply chains. Since e-commerce platforms have increased their shipping activity, there is an increasing need for faster and more efficient logistics services since such business expansion does not necessarily mean developing an internal logistics framework with high overhead costs.

Hence, logistics functions are typically outsourced since it is still possible to accommodate exponential growth while avoiding the mishandling of large investments in elaborate internal systems.

Logistics Outsourcing Market Segmentation

By Type

• Supply Chain Management
• Distribution Management
• Material Management
• Shipment Packaging
• Channel Management

 By Transportation

• Highway Transportation
• Air Transportation
• Sea Transportation
• Railway Transportation

By End User

• E-commerce
• Automotive
• Consumer packaged goods
• Aerospace, and government
• Food & beverages
• Others

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Drivers

• Demand for Efficient Logistics: The rapid growth of e-commerce has transformed logistics, creating a need for efficient and reliable solutions to process orders and deliver products quickly.
• Role of Outsourced Providers: Logistics outsourcing providers are essential for e-commerce fulfillment, last-mile delivery, and handling returns, which are critical for meeting customer expectations for speed and accuracy.
• Complexity of International Logistics: As supply chains become more complex, many businesses lack the internal resources to manage international logistics effectively, making outsourcing necessary.

Restraints

• Data Vulnerability in Logistics: The logistics outsourcing market relies heavily on digital data for key operations like shipment tracking and supply chain optimization. Sharing sensitive information with third-party providers increases the risk of data breaches and cyberattacks.
• Impact of Security Risks: Unauthorized access to supply chain data or customer information can result in financial losses, regulatory penalties, and harm to brand reputation, posing a challenge to market growth.

Opportunities

• Surge in E-commerce Growth: The rapid expansion of e-commerce has boosted the demand for logistics services, creating a significant opportunity for the logistics outsourcing market.
• Increased Complexity in Logistics: As online sales grow, logistics operations become more complex, prompting businesses to outsource these functions to specialized providers who can efficiently manage the increasing demands.
• Flexibility in Operations: E-commerce companies require flexible logistics solutions to adapt to fluctuating demand and fast delivery expectations.
• Cross-border Expansion: The rise of global e-commerce presents a growing opportunity for logistics outsourcing, with increasing demand for services that handle international shipping and customs procedures.

Regional Analysis

It is also forecasted that Asia Pacific is likely to be dominating the logistics outsourcing market as it will have 35.5% of the overall market by 2024. This growth is pursued by the constantly developing economy characterized by increased industrialization and urbanization which leads to the increased demand for the supply chain services. One of the key trends that can contribute to the growth of the logistics outsourcing market here is the growth of e-commerce.

Logistics costs have increased in recent years because companies are focusing on improving delivery performance given the demand of the large, young, informed customer base expected to shop online more as eradicating poverty gains pace.

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By Region

North America

• The U.S.
• Canada

Europe

• Germany
• The U.K.
• France
• Italy
• Russia
• Spain
• Benelux
• Nordic
• Rest of Europe

Asia-Pacific

• China
• Japan
• South Korea
• India
• ANZ
• ASEAN
• Rest of Asia-Pacific

Latin America

• Brazil
• Mexico
• Argentina
• Colombia
• Rest of Latin America

Middle East & Africa

• Saudi Arabia
• UAE
• South Africa
• Israel
• Egypt
• Rest of MEA

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Recent Developments

• October 2023: Foresight Group, a prominent regional private equity and infrastructure investment manager, revealed a USD 5.6 million investment in AmWorld Holdings Limited. This company provides courier, freight, logistics, and storage services to a loyal clientele of about 600 clients across various industries, with significant focus areas including video games, electronics, advertising, marketing, and IT services, both in the UK & internationally.
• September 2023: Amazon launched an automated solution designed to assist sellers in efficiently shipping products worldwide. This innovation allows sellers to spend less time managing their supply chains & more time focusing on product development, customer satisfaction, and business growth.
• April 2023: FedEx Corp. announced during its DRIVE Investor Event that it would streamline its operations by consolidating its companies into a single organization which aims to create efficiencies that will better address customer needs & ultimately strengthen the company’s profitability.
• March 2023: Mahindra Logistics Limited (MLL), a provider of integrated logistics solutions, partnered with Ascendas-Firstspace, an industrial real estate developer, to establish a new one million square feet multi-client warehouse park in Talegaon, Pune. The development will be executed in three phases, with the first phase of 0.5 million square feet expected to become operational soon.
• June 2022: Phonex Group announced its entry into Visakhapatnam Port, aiming to provide high-quality services that enhance efficiency & ensure the smooth delivery of products.

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