U.S. Third-party Logistics Market (By Service: DCC, DTM, ITM, VALs; By Transport: Roadways, Airways; By End-use: Manufacturing, Retail & E-commerce, Healthcare, Automotive) - Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The U.S. third-party logistics market was surpassed at USD 247.45 billion in 2023 and is expected to hit around USD 598.28 billion by 2033, growing at a CAGR of 9.23% from 2024 to 2033.

Key Pointers

• By Services, the DTM segment held the largest market share at 38% in 2023.
• By Services, the VALs segment is expected to expand at the highest CAGR during the forecast period.
• By Transport, the roadways segment had the largest market share of 82% in 2023.
• By Transport, the waterways segment is poised to exhibit the fastest CAGR from 2024 to 2033.
• By End-use, the retail & e-commerce segment secured the largest market share at 34%.
• By End-use, the manufacturing segment is anticipated to achieve the fastest CAGR from 2024 to 2033.

U.S. Third-party Logistics Market Overview

The U.S. third-party logistics (3PL) market plays a pivotal role in the country's supply chain ecosystem, facilitating efficient movement and management of goods. This overview delves into the key aspects of the U.S. 3PL market, shedding light on its growth drivers, market trends, and the evolving landscape.

U.S. Third-party Logistics Market Growth

The robust growth of the U.S. third-party logistics (3PL) market is underpinned by several key factors. Firstly, the ongoing globalization of supply chains has fueled a heightened demand for 3PL services, as businesses seek partners capable of navigating the intricacies of international trade. Secondly, the flourishing e-commerce sector has significantly influenced the market dynamics, with 3PL providers playing a pivotal role in managing the complexities of order fulfillment, inventory control, and last-mile delivery. Furthermore, the trend of outsourcing logistics functions continues to gain momentum, as companies recognize the strategic advantages of focusing on core competencies while entrusting specialized logistics expertise to 3PL partners. These growth factors collectively contribute to a dynamic and expanding U.S. 3PL market, positioned at the forefront of modern supply chain solutions.

U.S. Third-party Logistics Market Dynamics

U.S. Third-party Logistics Market Drivers

• Focus on Core Competencies: Businesses are opting to outsource logistics functions to 3PL providers, allowing them to concentrate on their core competencies. This strategic shift enhances operational efficiency and cost-effectiveness, with 3PL partners bringing specialized logistics knowledge to the table.
• Technology Integration: The incorporation of advanced technologies, such as artificial intelligence, Internet of Things (IoT), and blockchain, is driving the U.S. 3PL market. These technological integrations enhance visibility, traceability, and overall supply chain efficiency, meeting the evolving needs of modern logistics.

U.S. Third-party Logistics Market Restraints

• Cybersecurity Risks: With the increasing reliance on digital technologies, the 3PL sector is susceptible to cybersecurity threats. The potential for data breaches and disruptions in digital supply chain systems poses a significant restraint, necessitating robust cybersecurity measures to safeguard sensitive information.
• Dependency on Economic Conditions: The U.S. 3PL market is influenced by broader economic conditions, and economic downturns can impact overall demand for logistics services. Fluctuations in consumer spending, trade uncertainties, or recessionary trends can lead to reduced business activities and, subsequently, a downturn in demand for 3PL services.

U.S. Third-party Logistics Market Opportunities

• Global Trade Expansion: With the continued globalization of trade, there is an opportunity for 3PL providers to expand their global reach. Offering comprehensive international logistics solutions, including customs clearance, cross-border transportation, and trade compliance services, can position 3PLs as essential partners for businesses engaged in global trade.
• Value-added Services: Providing value-added services beyond traditional logistics can be a lucrative opportunity for 3PL providers. Services such as packaging, labeling, kitting, and reverse logistics can add significant value to the overall supply chain, addressing the diverse needs of clients and enhancing customer satisfaction.

Service Insights

In terms of services, the market is categorized into various segments, including domestic transportation management (DTM), dedicated contract carriage (DCC)/freight forwarding, warehousing & distribution (W&D), international transportation management (ITM), and value-added logistics services (VALs). The DTM segment held the largest market share at 38% in 2023, primarily driven by the continuous rise in carrier rates. Businesses, in response to escalating costs, are increasingly turning to third-party logistics (3PL) providers to streamline transportation expenses and enhance overall operational efficiency. Outsourcing DTM to a 3PL provider proves beneficial in cost reduction, as these providers leverage their purchasing power and expansive transportation networks to negotiate more favorable rates with carriers, ultimately lowering transportation costs for clients. Furthermore, 3PL providers play a crucial role in optimizing the transportation process, reducing transportation time, and improving delivery reliability.

The VALs segment is anticipated to achieve the highest CAGR over the forecast period. VALs encompass services that go beyond conventional logistics and transportation offerings provided by 3PL providers. These services add significant value to customers by enhancing the functionality and efficiency of the supply chain. As businesses increasingly seek specialized logistics services to meet unique requirements, the demand for value-added logistics services, including inventory management, packaging, labeling, kitting, customization, and reverse logistics, is on the rise. This trend aligns with companies' focus on improving customer satisfaction and optimizing supply chain operations, indicating a growing demand for value-added logistics services in the market.

Transport Insights

In 2023, the roadways segment dominated the market, holding an impressive 82% market share. This segment's strength lies in its adaptability to changing demands and requirements, offering a crucial advantage. Third-party logistics (3PL) providers within the road transport segment can tailor their services by utilizing vehicles of various types and sizes, aligning precisely with the unique needs of each customer. This customization not only enhances efficiency but also contributes to cost savings. Additionally, road transport ensures a high level of visibility and control across the entire supply chain, further bolstering its position as a preferred mode of transportation.

Looking ahead, the waterways segment is poised to exhibit the fastest Compound Annual Growth Rate (CAGR) from 2024 to 2033. Waterways offer an efficient and cost-effective solution for transporting goods in large volumes over extended distances, making them particularly favorable for bulky and heavy items. 3PL companies play a pivotal role in optimizing supply chain operations and reducing transportation costs by facilitating the movement of goods via waterways. A key advantage of waterway transportation is its high energy efficiency, involving significantly lower fuel consumption per ton-mile compared to alternative modes of transportation. This positions waterways as a sustainable and economically viable choice for the future of logistics.

End-use Insights

In 2023, the retail & e-commerce segment secured the largest market share at 34%. This dominance is attributed to the rapid growth experienced by e-commerce businesses, particularly during peak shopping periods like Black Friday and Cyber Monday. Third-party logistics (3PL) providers play a crucial role in supporting this growth by offering flexible scaling capabilities. This eliminates the need for e-commerce businesses to invest in dedicated infrastructure or personnel. The adoption of 3PL services is driven by the imperative for efficient and cost-effective order fulfillment, international shipping expertise, and the essential elements of flexibility and scalability. 3PL companies further aid retailers by providing a suite of services, including transportation management, inventory management, warehousing and distribution, and e-commerce fulfillment. Outsourcing these functions allows retailers to concentrate on their core competencies, such as merchandising and marketing.

Looking ahead, the manufacturing segment is anticipated to achieve the fastest CAGR from 2024 to 2033. The growth in this sector is propelled by intricate supply chains, global operations, a focus on efficiency and cost optimization, strategic emphasis on core competencies, the need for customized solutions, scalability requirements, technology integration, regulatory compliance, and adherence to Just-in-Time inventory practices. Many manufacturing companies operate on a global scale, engaging in the sourcing of materials from diverse locations and the international distribution of finished goods. 3PL providers play a pivotal role in facilitating seamless global trade by optimizing transportation, ensuring compliance with customs regulations, and fostering the efficient flow of goods across international borders.

U.S. Third-party Logistics Market Key Companies

• Ultra
• BDP INTERNATIONAL INC.
• Burris Logistics
• C.H. Robinson Worldwide, Inc
• CEVA Logistics
• DSV
• DB Schenker Logistics
• FedEx
• J.B. Hunt Transport, Inc.
• Kuehne + Nagel
• Nippon Express
• United Parcel Service of America, Inc
• XPO Inc.
• Yusen Logistics Co. Ltd.
• Ryder System, Inc.
• Flexport Inc.

U.S. Third-party Logistics Market Segmentations:

By Services

• Dedicated Contract Carriage (DCC)/Freight Forwarding
• Domestic Transportation Management (DTM)
• International Transportation Management (ITM)
• Warehousing & Distribution (W&D)
• Value Added Logistics services (VALs)

By Transport

• Roadways
• Railways
• Waterways
• Airways

By End-use

• Manufacturing
• Retail & E-commerce
• Healthcare
• Automotive
• Others