The Global Logistics Business Outsourcing Market was estimated to be US$ 194.38 Billion in 2022 and is expected grow at a CAGR of 7.7% between 2023 to 2032.
Logistics business outsourcing is a business practice in which a company contracts out all or part of its logistics operations to a third-party service provider. The third-party service provider is responsible for providing a range of logistics services, including transportation, warehousing, inventory management, and distribution. By outsourcing logistics operations, companies can focus on their core business activities while benefiting from the expertise and resources of the service provider.
The global logistics business outsourcing market is being driven by various factors such as the increasing globalization and international trade, growing e-commerce industry, and rising demand for integrated supply chain solutions. The expansion of companies into new markets and the need for efficient transportation and distribution services to move goods across borders has created a surge in demand for logistics and supply chain services. The Belt and Road Initiative by China, for example, aims to connect Asia, Europe, and Africa through a network of transportation and infrastructure projects that will require logistics and supply chain services to facilitate international trade.
Furthermore, the growing e-commerce industry has created a demand for logistics and supply chain services to fulfill online orders and deliver goods to customers. Amazon, the world's largest online retailer, has invested heavily in logistics and supply chain management to ensure timely delivery of orders to customers. On the other hand, there is a growing demand for integrated supply chain solutions that can provide end-to-end visibility and control over the entire logistics process. Companies are seeking solutions that can help them manage their entire supply chain, from sourcing raw materials to delivering finished products to customers. Maersk, for instance, has developed an integrated supply chain solution that combines transportation and logistics services with digital platforms to provide real-time visibility and control over the entire supply chain, allowing customers to track their shipments, manage inventory, and optimize their logistics operations.
Based on end-use industry, the manufacturing sector is generally considered the largest end-user segment in the logistics business outsourcing market. This is because manufacturing companies typically have complex and varied logistics needs, including inbound raw materials, outbound finished goods, and internal material handling and distribution. As such, manufacturing companies often require a wide range of logistics services, such as transportation, warehousing, inventory management, and order fulfillment, to support their operations.
In addition to the manufacturing sector, other significant end-user segments in the logistics business outsourcing market include e-commerce, healthcare, automotive, chemical, food & beverages and aerospace and defense. The e-commerce sector, for instance, has experienced significant growth in recent years, driving demand for logistics services such as last-mile delivery and returns management. The healthcare sector, meanwhile, requires specialized logistics services to transport sensitive and high-value medical products such as pharmaceuticals and medical devices. Overall, the size of each end-user segment in the logistics business outsourcing market depends on various factors such as industry trends, supply chain complexity, and the level of outsourcing adoption in each sector. However, manufacturing remains the largest segment due to the broad range of logistics services required to support its operations.
Geographically, the global logistics business outsourcing market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and South America. Following are some of the major trends in these regions –
North America: North America is a mature market for logistics outsourcing, with the United States being a major contributor to the region's growth. Factors driving the market in North America include the increasing focus on supply chain efficiency, rising demand for e-commerce fulfillment services, and the need for cost-effective logistics solutions.
Europe: The logistics business outsourcing market in Europe is driven by factors such as the growth of cross-border e-commerce, the increasing demand for temperature-controlled logistics services, and the need for sustainable logistics solutions. Additionally, the region is witnessing a trend towards the adoption of digital technologies such as artificial intelligence and blockchain in logistics operations.
Asia-Pacific: The Asia-Pacific region is a significant market for logistics outsourcing, driven by factors such as the region's rapid economic growth, increasing trade volumes, and rising consumer demand for e-commerce goods. The logistics business outsourcing market in the region is also characterized by the presence of a large number of small and medium-sized logistics providers, as well as the adoption of digital technologies in logistics operations.
Middle East and Africa: The logistics business outsourcing market in the Middle East and Africa region is driven by factors such as the growth of the retail and e-commerce sectors, increasing investment in logistics infrastructure, and the need for more efficient and cost-effective logistics solutions. The region is also witnessing an increase in the adoption of advanced logistics technologies such as autonomous vehicles and drones.
South America: The logistics business outsourcing market in South America is driven by factors such as the growth of the e-commerce sector, increasing investment in logistics infrastructure, and rising demand for specialized logistics services such as cold chain logistics. Additionally, the region's geographic and regulatory complexity is driving the demand for logistics services to navigate cross-border trade.
Companies operating in the global logistics business outsourcing market have adopted a range of growth strategies to expand their market share and revenue. Some of the major growth strategies adopted by these companies include:
Mergers and Acquisitions: Companies have been acquiring or merging with other logistics firms to increase their market share and expand their service offerings. For instance, in 2021, DHL acquired J.F. Hillebrand, a logistics provider specializing in the beverage industry, to expand its service offerings in the wine and spirits sector.
Strategic Partnerships and Alliances: Logistics companies have formed strategic partnerships and alliances with other players in the industry to enhance their service offerings and reach. For instance, in 2020, DHL Global Forwarding formed a strategic partnership with Air France KLM Martinair Cargo to expand its air freight services.
Expansion into New Geographies: Companies have been expanding their operations into new geographies to tap into new markets and revenue streams. For instance, in 2021, Agility Logistics announced plans to expand its operations in Africa, with a focus on East Africa.
Investment in Technology: Logistics companies have been investing in technology to improve their service offerings and increase efficiency. For instance, FedEx has been investing in automation and robotics to streamline its logistics operations.
Diversification of Service Offerings: Logistics companies have been diversifying their service offerings to cater to a broader range of customer needs. For instance, UPS has been expanding its healthcare logistics services to cater to the growing demand for medical supply chain solutions.
Some of the biggest companies operating in the global logistics business outsourcing market are: CEVA Logistics, DB Schenker, DHL Supply Chain, FedEx, GEODIS, Kuehne + Nagel, Nippon Express, Panalpina, Ryder, Sankyu Inc., Schneider Electric SE, Sinotrans Ltd., UPS, XPO Logistics, Yusen Logistics Co. Ltd. and many more.
By Service Type:
By Transport Mode:
By End-Use Industry:
By Region:
The logistics business outsourcing market was estimated to be US$ 194.38 Billion in 2022.
North America region will lead the global logistics business outsourcing market. North America include the increasing focus on supply chain efficiency, rising demand for e-commerce fulfillment services, and the need for cost-effective logistics solutions.
CEVA Logistics, DB Schenker, DHL Supply Chain, FedEx, GEODIS, Kuehne + Nagel, Nippon Express, Panalpina, Ryder, Sankyu Inc., Schneider Electric SE, Sinotrans Ltd., UPS, XPO Logistics, Yusen Logistics Co. Ltd. and among others are the leading players in this market.
The global logistics business outsourcing market is being driven by various factors such as the increasing globalization and international trade, growing e-commerce industry, and rising demand for integrated supply chain solutions.
based on Service type, the Logistics Business Outsourcing market segmented into Transportation Management, Warehousing and Distribution, Freight Forwarding, Packaging and Labeling, Other Services
is expected grow at a CAGR of 7.7% between 2023 to 2032.
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