As per the projection made in the
‘Global and China Third-Party Logistics Report, 2016-2020’, published in
February 2017, in future, by virtue of high efficiency and highly standardised
operations, the third-party logistics (3PL) market size will grow steadily,
expectedly outstripping $900 billion in 2020, with a share of nearly 10 per cent
of the market.
3PL can not only help companies
complete cargo movement but also effectively reduce logistics costs and speed up
cargo turnover, fully meeting their requirements on logistics quality. The
report reveals that in 2015 the global 3PL market size hit $721 billion, a
year-on-year (YoY) rise of 4.5 per cent, occupying 8.2 per cent of the logistics
market size, and increased around $35.9 billion in 2016, up to $756.9 billion.
Mr Brijesh Lohia, Managing Director of Global
Ocean Group, says, "The specific nature of
the study demonstrates the upward curve for the 3PL sector. We can already say
that the year 2017 is logistics year. Newer technologies such as Big Data and
Analytics will become a core competency of supply chain operations in the future
of third-party logistics sector. Thus further confirming the predictions made by
"Although the effects of
demonetisation had adversely affected the 3PL sector towards the end of 2016,
the announcement for infrastructure development in Budget 2017 has opened
corridors for boost in the sector. We can already affirm contribution of Indian
3PL market towards the promising global growth statistics," he added.
China is the world’s largest
third-party logistics market. In 2015, its market size attained RMB 1,065.2
billion or roughly $171.8 billion (up 13.6 per cent YoY, a 23.8 per cent share
in the global market, and reached around RMB 1,200 billion in 2016. Chinese
(Mainland China) third-party logistics industry is still in its infancy and lags
behind the developed countries/regions by share in the entire logistics market
(developed regions are generally above 10.5 per cent, Mainland China around 8
per cent), leaving a large development space. Moreover, China’s regional trade
imbalance also creates certain opportunities for the rapid development of
third-party logistics. It is predicted that the third-party logistics market
size in China will see a CAGR of around 15 per cent in the period 2016-2020.
Additionally, by not having a high
market share, Chinese third-party logistics industry also has problems of
insufficient and low-level demand due to the relatively little use of
third-party logistics by most traditional companies, the basic and conventional
demand of companies that choose third-party logistics and their limited demand
for high value-added, comprehensive logistics services.
Development trend: To improve
profitability and maximise operational efficiency, third-party logistics is
heading towards large-scale, informatisation and asset-light. In addition, as
E-commerce in China gradually spreads to regions outside the first-tier cities,
third-party logistics companies can make their presence felt in the second- and
Seen from the competitive landscape,
the third-party logistics market has a low concentration rate, and the players
compete fiercely, said a release.