Logistics

In recent years, more companies have chosen to outsource their secondary operations to third-party logistics (3PL) providers, who already have the expertise and resources to manage and simplify their supply chains. The global and domestic markets for outsourced logistics services are constantly evolving. Consequently, it is becoming fundamental that 3PL providers and users become increasingly efficient in terms of processes, customer relationships, and technology.

Since the COVID-19 pandemic, last-mile deliveries have become a necessity in retail and e-commerce, as users are switching from traditional stores to ordering from the comfort of their own homes. This shift to e-commerce created opportunities and challenges for the sector, as technological advances forced last-mile firms to adapt to new demands swiftly. The strategic battle for this last mile is set to be an arduous one, played out between online retailers and logistics companies alike.

The coronavirus pandemic highlighted the shortcomings and, in some cases, the strengths of players in the logistics market around the world. Though difficult, 2020 through to 2022 were busy years for courier companies like United Parcel Service (UPS), FedEx, and DHL. Since then, couriers continue to be in high demand despite retail stores re-opening, mainly because consumer behavior has shifted to online commerce and this behavior is expected to continue in future.

The United States, China, Japan, and Germany are among the most important third-party logistics (3PL) services markets. After being the largest 3PL market in 2021, China was overtaken by the U.S. market in 2022. The U.S. domestic market is again the world’s largest 3PL market, generating 231.5 billion U.S. dollars in revenue from 3PL services. The largest 3PL companies in the U.S. are C.H. Robinson, XPO Logistics, and United Parcel Service (UPS).