Global 3PL market to increase at a CAGR of 4.5%

Press Release   •   Jul 23, 2013 14:41 BST

The global 3PL market (Third Party Logistics) has been forecast to increase at a compound annual growth rate (CAGR) of 4.47% through to 2016, driven by the use of cloud technology to help with the centralisation of processes, along with the cost incurred by the shipper reducing by using 3PL services.

According to a recent report, 'Global 3PL Market 2012-2016,' one of the main drivers in this market is the reduction in logistics cost achieved by shippers by availing the services of 3PL providers. By outsourcing the logistics part of their operations to 3PL providers, customers can improve the efficiency of their business by focusing on their core competencies.

A 3PL provider is a firm that provides service to its customers of outsourced logistics services for part, or all of their supply chain management functions.

Third party logistics providers typically specialise in integrated operation, warehousing, and transportation services that can be scaled and customised to customers' needs based on market conditions and the demands and delivery service requirements for their products and materials.

Often, these services go beyond logistics and included value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. Then the provider is called third-party supply chain management provider (3PSCM) or supply chain management service provider (SCMSP).

In recent years, cloud technology has been fast gaining popularity across the world and in various industries. 3PL providers are also embracing cloud technology, where all their data would be stored in the cloud and can be accessed at any point of time.

Moreover, cloud technology will provide shippers a control over their data and processes. More importantly, it will help in establishing transparency in the relationship between the vendors and the clients. In addition, it will solve the IT system compatibility issues faced by both sides.

Future 3PL services will be cloud-based, thereby enabling shippers across the globe to access 3PL services and systems. Thus, the centralisation of data with cloud technology is an emerging trend that will drive the market in future years.

Key players currently dominating the global 3PL market include DB Schenker, Deutsche Post DHL, Kuehne + Nagel International AG, and Nippon Express Co. Ltd.

For more information on the global 3PL market, see the latest research: Logistics Market Research

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