With the growing adoption of e-commerce and digital literacy, consumers and companies have been increasingly outsourcing the logistics and operation of business process to 3PL companies in the USA. Outsourcing the logistics services not only help businesses in reduction of costs but also ensures them to achieve high economies of scale. 3PL companies have been increasingly offering customized services including warehousing, transportation, delivery, and other related operations. These companies help the businesses in mitigating incidents and preventing downtime by using multimodal shipping services and logistics solutions and creating custom logistics solutions for businesses. The US 3PL market size will grow by USD 228 billion in the US by 2022. Technavio’s 3PL market in the US identifies the introduction of blockchain technology as one of the key logistics market trends expected to gain traction during the next few years.
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The US 3PL Market Analysis
With the introduction of blockchain technology quickly gaining traction in the market, various logistics service providers are increasingly adopting the technology for improving efficiency and data security in the supply chain. Companies in the market have been engaging into strategic partnerships for leveraging blockchain technology. For instance, in February 2018, Borque Logistics announced its membership in the Blockchain in Transportation Alliance (BiTA) for providing high-quality services to rail shipper customers. Consequently, such partnerships will lead the market to register a CAGR of over 4% while registering an incremental growth of USD 43 billion during 2017-2022. The retail end-user industry segment held the largest share in the US 3PL market owing to the adoption of e-commerce and e-retail in the US.
Related market report: 3PL Market in Europe 2018-2022
Top 3PL Companies in the USA 2018
Founded in the year 1906 and headquartered in Georgia, United Parcel Service (UPS) garnered a revenue of USD 6.87 billion in 2017. The company has been able to retain its significant position in the top 3PL companies in the USA owing to its ability to offer shipping and logistics services across industries including aerospace, automotive, healthcare, consumer services, and other sectors. In August 2018, the company launched Ware2Go, a new technology company using innovative online technology for matching excess warehouse and fulfillment capacity to offer order fulfillment, transparent inventory, and final delivery. In July 2018, the company announced collaboration with Thor Trucks for developing and testing a fully-electric class 6 delivery truck in California, which will be an added advantage for the company to remain a significant third-party logistics and transportation market player in the US.
Services offered: courier express services, freight forwarding services, logistics services
The company was headquartered in Washington with over 17,000 employees across the globe. Founded in 1979, Expeditors International garnered a revenue of USD 6.92 billion in 2017 by catering to the industries including retail, fashion, technology, oil & energy, manufacturing, healthcare, automotive, aerospace. The company has been able to make its mark in the global third-party logistics market by offering a wide range of transportation and logistics services. The need for parcel services and e-commerce companies are increasingly preferring 3PL companies in the USA for a streamlined supply chain management.
Services provided: supply chain services, transportation, customs & compliance, and warehousing & distribution
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The company was founded as Express-1 Expedited Solutions in 1989 and has been specializing in moving time-sensitive freight. XPO Logistics have over 50,000 customers across the world with over 97,000 employees. Various awards and recognitions to the company has enabled it to make it to the list of top 3PL companies in the USA. The company has been on a mergers and acquisitions spree to strengthen its product-portfolio for becoming one-stop solution for supply chain, transportation and distribution services. The company’s key reporting segments including transportation and logistics enabling it to garner a revenue of USD 15.38 billion as of 2017. In October 2018, the company announced its plans to deploy 5,000 intelligent robots across sites in North America and Europe as the adoption of intelligent automation improves worker’s productivity and speeds up distribution.
Services offered: contract logistics, freight brokerage, ground & air expedited freight, managed transportation, intermodal transport, domestic freight forwarding, last mile logistics, and truckload transportation
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Headquartered in Tennessee and founded in 1971, FedEx has captures one of the most significant position in the top 3PL companies in the USA while gaining popularity for its overnight shipping service and a system for tracking packages and providing real-time updates on courier packages. The company employees over 425,000 people across the globe as of 2018 and garnered a revenue of USD 65.45 billion. The company operates through different subsidiaries including FedEx Services (FedEx Office and FedEx Trade Networks), FedEx Express, FedEx Ground, and FedEx Freight. In April 2018, the company’s FedEx Office extended its local courier delivery service named FedEx SameDay City in Oregon. With the help of this service consumers including retailers and small business owners get their parcels delivered within hours by uniformed FedEx drivers in branded vehicles with real-time notifications. This last-mile delivery market player in the US has been also focusing on expanding its product portfolio by the acquisition of P2P, a UK-based e-commerce transportation solutions provider.
Services offered: post and mail delivery, freight forwarding, third-party logistics, and express mail
Based in Minnesota and founded in 1905, C.H. Robinson has been employing over 11,000 people. The company earned an annual turnover of USD 14.87 billion as of 2017 by offering services including supply chain analysis, information reporting, freight consolidation, and core carrier program management. The company has been offering its logistics services and solutions to a wide range of industries including automotive, FMCG, paper & packaging, retail, healthcare, government & education sector. The growing development of transportation and logistics infrastructure is one of the key promoters of the freight brokerage market in the Americas.
Services offered: ocean shipping, air freight, intermodal & rail, project logistics, supply chain consulting services, TMS for small businesses, and managed TMS.
Related market report: Third-party Logistics Market in China 2018-2022
3PL Market Trends: Future of the 3PL Companies in the USA
The growing automation in the logistics industry and increased investment and growing market consolidation are transforming the 3PL logistics industry. Additionally, the inception of blockchain technology has also enabled the companies to offer a distributed transaction ledger wherein identical copies of the ledger are easily maintained in multiple computer systems that stakeholders’ control. The use of this technology system eliminates the need for a central authority to maintain records. Furthermore, the use of this technology will also help in reducing the overhead costs as according to the estimation in 2017, over 15%-20% of the total cost of transportation was spent on the processing of documents and for administration. Consequently, such trends are expected to further foster the 3PL market in the US during the predicted period.
Frequently Asked Questions in the US 3PL market:
- What is a 3PL company?
- What is the current US 3PL market share?
- What are the latest 3PL market trends being following in the USA?
- Who are the top 3PL companies in the USA?
- What are the key 3PL market drivers and challenges in the USA?
All the detailed answers can be found in this following market report: