United States Third Party Logistics Market to Grow at 6.9% through 2028

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United States Third Party Logistics Market

United States Third Party Logistics Market is flourishing owing to the increasing e-commerce sector, the development of new technologies, rising working capital, and globalization are all driving demand for efficient inventory management services in the United States.

A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the United States Third Party Logistics Market was worth USD 226.7 billion in the year 2021. The market is projected to grow at a CAGR of 6.9%, earning revenues of around USD 362.8 billion by the end of 2028. The United States Third Party Logistics Market is booming because of the established network of industrial operations. Its effective maintenance is expected to increase demand for 3PL services. Furthermore, it is anticipated that during the projection period, the variety of 3PL services would increase as supply chain productivity benefits in terms of cost and dependability can be attained with the help of managerial and IT know-how provided by 3PL organizations. The development of the e-commerce industry and a rise in reverse logistics activities are other factors driving the growth of the US 3PL services market. However, the potential loss of reputation and the loss of direct competition is the most significant issues impeding the growth of this sector.

Increasing E-Commerce to Accelerate Market Growth

The E-Commerce sector underwent substantial developments across the globe during the epidemic. Customers now expect deliveries to be made on time. Customers select options for same-day and next-day delivery. As a result, several businesses started offering logistical services to meet customer demands. Additionally, it is anticipated that the need for logistics services like expedited delivery and inventory management would rise as e-commerce continues to expand. The demand for 3PL service providers would soar in tier 3 and tier 5 cities where logistics services are in great demand. Additionally, it is anticipated that the United States Third Party Logistics would rise as a result of rising urbanization, higher internet and mobile penetration, an increase in the number of warehouses, and the expansion of the logistics sector.

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Core Competencies are Receiving more Attention from Manufacturers and Retailers

Manufacturers and retailers are increasingly concentrating on their main operations in the market and outsourcing services like logistics where they lack expertise. The major goal in this case is to promote specialist manufacturing and distribution. 3PL companies can maximize the usage of transportation assets and gain economies of scale by balancing the needs of diverse client shippers throughout the transportation and distribution operations. Outsourcing and offshore result in longer and more complicated supply networks. Since managing this kind of supply chain is exceedingly difficult for manufacturers, there will likely be an increase in demand for 3PL service providers in the years to come.

Challenge: Threat to the Manufacturer’s Good Name

Third-party logistics service providers take care of one of the most crucial business processes, which includes managing customs and distribution as well as order fulfillment. Due to their mistake, the manufacturer’s standing and rapport with customers are likely to deteriorate. The reputation of the manufacturing company suffers when a 3PL service provider is unable to complete an order by the deadline, which affects consumer trust in the brand. This problem is predicted to restrict the growth of the global 3PL market.

Segmental Coverage

United States Third Party Logistics Market – By end-User

Based on end-user, the United States Third-Party Logistics Market is segmented into Automotive, Healthcare, Retail, Consumer Goods, and Others. Currently, the retail sector holds the largest market share, and during the projected period, this is likely to be the case (2022-2028). The raw materials and other components used in the retail sector are purchased from a variety of regional resources. Logistics is a time-consuming operation because it involves numerous suppliers and distributors. The industrial industry is outsourcing logistics retail activities due to the advantages offered in terms of reduced transportation costs, supply chain visibility, inventory and vendor management, business process development, and increased customer services. The United States manufacturing sectors have seen a surge in retail activity.

Impact of COVID-19 on United States Third Party Logistics Market

The COVID-19 pandemic has affected a number of enterprises across the country. Governments all around the country adopted strict lockdown guidelines and social segregation norms to slow the pandemic’s quick spread. All around the world, factories were shut down in the early stages of the outbreak. A significant delay in the commercial debut of the IT sector could also be brought on by the economic collapse that followed the outbreak. Since the pandemic’s emergence in 2020, small and medium-sized businesses—the backbone of technology providers—have witnessed a dramatic fall in revenue. The supply chain interruptions presented a number of challenges for market participants. Things will improve, though, when more supplies come online in the second half of 2022.

Competitive Landscape

The leading market players in the United States ThirdParty Logistics Market are A.N. Deringer Inc, AmeriCold Logistics, LLC, BDP International, Inc., Burris Logistics, C.H. Robinson, CEVAlogistics, CITI Solutions, DHLInternational GmbH, FedEx Corporation, Kuehne + Nagel Inc., Nippon Express Co. Ltd, PANTOS Co. Ltd, Schneider National, Inc., XPO Logistics, Yusen Logistics Co. Ltd., UPS, JB Hunt, and other prominent players. The United States Third Party Logistics Market is highly fragmented with the presence of several manufacturing companies in the country. The market leaders retain their supremacy by spending on research and development, incorporating cutting-edge technology into their goods, and releasing upgraded items for customers. Various tactics, including strategic alliances, agreements, mergers, and partnerships, are used.

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