Fourth Party Logistics Market Forecast (2024-2031), Size, Share
The fourth party logistics market size is projected to reach US$ 121.63 billion by 2031 from US$ 71.89 billion in 2023. The market is expected to register a CAGR of 6.79% in 2023–2031.
The Advent of Industry 4.0 has resulted in the digital transformation of the manufacturing sector. Various players are harnessing the power of such sophisticated digital technologies, which is offering a competitive edge to their client companies by streamlining various supply chain processes.
Fourth Party Logistics Market Analysis
It has been observed that regional demographics have also played a vital role in the growth of the 4PL services market. As an example, the 4PL adoptions is observed by the retail sector, which in-turn has bolstered due to the advent of e-commerce. The market attractiveness for e-commerce industry is very high in the region, as APAC region boasts of more than one-third of the world population. Further, developing economies and rising disposable incomes with individuals have proppeled further the growth in e-commerce industry.
Increasing demand diversities owing to the diverse demographics observed in the region which contributes to the supply chain complexities. Such complex supply chain contributed to the growing needs for 4PL services to be deployed by the shipping companies. Since last decade, the demand in different end-user industry has accelerated significantly with growing adoption of digitalized technologies and further technological enhancements. As leading players in this market continue to expand their addressable market, by broadning current product portfolios, diversifying client bases, and developing new applications and markets, all the prominent players faces an intense level of competition.
Fourth Party Logistics Market Overview
Outsourcing the entire supply chain functionality to a more knowledgeable partner in the supply chain management arena reduces the complexities associated with last-mile deliveries. Some of the intangible benefits achieved through outsourcing logistics include cost savings, human capital savings, no lock-in of working capital, and better access to customer networks.
The emergence of fourth party logistics concept has essentially been a move towards removing all the above-mentioned bottlenecks in the increasingly complex supply chain environment. Fourth-party logistic (4PL) services are also termed as supply-chain-as-a-service, where the 4PL provider integrates themselves with the customer company's logistics department. This empowers the 4PL service provider with a hands-on approach to the entire operations involved in a supply chain ranging from order management to warehousing and compliance regulations to supplier management. A 4PL service provider would act as the single link of interface between the numerous supply chain providers and the client organization. With this, the 4PL provider manages all the operations with sophisticated resources to optimize and deliver value to its customers.
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Fourth Party Logistics Market: Strategic Insights
Market Size Value in US$ 56,472.1 Million in 2019 Market Size Value by US$ 78,981.5 Million by 2027 Growth rate CAGR of 4.5% from 2020-2027 Forecast Period 2020-2027 Base Year 2020
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Fourth Party Logistics Market: Strategic Insights
| Market Size Value in | US$ 56,472.1 Million in 2019 |
| Market Size Value by | US$ 78,981.5 Million by 2027 |
| Growth rate | CAGR of 4.5% from 2020-2027 |
| Forecast Period | 2020-2027 |
| Base Year | 2020 |
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Fourth Party Logistics Market Drivers and Opportunities
Advent of Industry 4.0 and Rising Technology Integration in Manufacturing
Emerging digital technologies such as advanced software, cloud computing, and Big Data could be used to great effect by the 4PL service providers for maintaining visibility across the entire supply chain improving visibility, transparency, operations, and productivity. Further, as technologies such as Internet of Things (IoT), automation, and robotics gain more prominence, the needs for deployments of 4PL by the organizations is anticipated to accentuate rapidly.
Rising Demand for Seamless Supply Chain Operations for Enhanced Productivity
In a supply chain, the moving parts are sometimes subject to unforeseeable circumstances like natural disasters, geopolitical tensions, environmental issues, tariff-related complications, and regulations, as well as compliance fluctuations. Further, the fragmented nature of the supply chains leads to a lack of communication and transparency among the involved entities. The current demands from consumers are highly dynamic, and even a small dissatisfaction at the consumer end could have a large impact on the company's bottom lines. The meteoric rise of on-demand delivery of products has propelled today's businesses to shift from the conventional in-house logistic models to a more advanced and cost-efficient outsourced or contract-based logistics model.
Fourth Party Logistics Market Report Segmentation Analysis
Key segments that contributed to the derivation of the fourth party logistics market analysis are type, and end user.
- Based on type, the market has been divided into synergy plus operating model, solution integrator model, and industry innovator model. The solution integrator model segment held a larger market share in 2023.
- Based on end user, the market is segmented into aerospace & defense, automotive, consumer electronics, food & beverages, industrial, healthcare, retail, and others. The retail segment held the largest share of the market in 2023.
Fourth Party Logistics Market Analysis by Geography
The geographic scope of the fourth party logistics market report is mainly divided into five regions: North America, Europe, Asia Pacific, Middle East & Africa, and South America.
The scope of the fourth party logistics market report encompasses North America (the US, Canada, and Mexico), Europe (Spain, the UK, Germany, France, Italy, and the Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and the Rest of Asia Pacific), the Middle East & Africa (South Africa, Saudi Arabia, the UAE, and the Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and the Rest of South & Central America). In terms of revenue, APAC dominated the fourth party logistics market share in 2023. Europe is the second-largest contributor to the global fourth party logistics market, followed by North America.
The economically prosperous region of North America constitutes of highly advanced economies of the US and Canada. Industrialization has remained a high priority in the advanced economies of the US and Canada, which has also been the main factor driving the economy over the years. The US is said to boast the world's most technologically advanced automotive, healthcare, aerospace & defense, as well as consumer electronics sectors. High-volume manufacturing and the allied trades carried out with other nations of the world make the North American region a strategic hub for transportation and logistics-based services. Being economically advanced, companies in North America have large budgets to spend on transportation and logistics-based activities and, therefore, contribute to the development of fourth party logistics market. The presence of an established digital infrastructure in North America further accentuates expansions in the horizons pertaining to logistic provisioning services. Type (Synergy Plus Operating Model, Solution Integrator Model, and Industry Innovator Model); End User (Aerospace & Defense, Automotive, Consumer Electronics, Food & Beverages, Industrial, Healthcare, Retail, and Others)
Fourth Party Logistics Market Report Scope
Fourth Party Logistics Market News and Recent Developments
The fourth party logistics market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. The following is a list of developments in the market for fourth party logistics market and strategies:
- On December 2023, XPO (NYSE: XPO), a leading provider of LTL freight transportation in North America, announced that the United States Bankruptcy Court for the District of Delaware has approved the company’s offer to acquire 28 service center locations previously operated by Yellow Corporation. XPO will purchase 26 service centers and assume existing leases for the other two locations. The transaction is expected to close by the end of 2023. (Source: XPO, Press Release/Company Website/Newsletter)
Fourth Party Logistics Market Report Coverage and Deliverables
The “fourth party logistics market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:
- Market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Market dynamics such as drivers, restraints, and key opportunities
- Key future trends
- Detailed Porter’s Five Forces analysis
- Global and regional market analysis covering key market trends, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments
- Detailed company profiles with SWOT analysis
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Type , and End User
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Saudi Arabia, South Africa, Spain, Taiwan, United Arab Emirates, United Kingdom, United States
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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