The global 4PL market was valued at almost USD 28 billion in 2016 and is expected to reach USD 53 billion by 2021.
Procurement market intelligence analysts have announced its latest market research report on 4PL for the period 2017-2021. This market analysis discusses the major drivers and key emerging trends that will influence the growth of the 4PL market during the forecast period. Some of the top vendors listed in this industry analysis include GEFCO, Damco, DHL, Kuehne + Nagel, and CEVA Logistics.
In terms of geographical analysis, EMEA dominated the global 4PL market during 2016 by accounting for 46% of the overall market share. The growth of the market in this region is attributable to the use of 4PL services in efficient warehousing, distribution, and other logistics support activities.
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According to Angad Singh, a procurement specialist at Technavio for research on category spend intelligence, “The rapid expansion of Internet and resulting information sharing has intensified market competition, and subsequently increased visibility and transparency in pricing. Such changes enable companies to unbundle production processes and distribute them across several geographies to reduce costs. Technology-based unbundling of services also helps improve supply chain performance.”
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The new procurement market intelligence report analyzes some of the key drivers and trends responsible for the growth of this market and its sub-segments.
Need for reduction of operational costs
4PL service providers have a well-distributed network and an efficient logistics systems that help to reduce cost across every element in the supply chain. By following a gain-sharing approach, suppliers have developed an operating model that reduces variable costs and allows buyers to reduce capital investment. This operating model enables buyers to focus on developing core business activities.
Availability of low-cost technology infrastructure
Service providers offer advanced technology systems by using large computing systems that offer high-speed computing at low cost and high information visibility to customers. The rapid growth of Internet has fueled the development of online systems leading to real-time monitoring and tracking, resulting in enhanced customer service. For instance, service providers offer highly sophisticated TMS that offer integration to various carriers and vendors to enhance planning efficiencies and direct visibility over orders across multiple geographies
Growth of global supply chains
Fueled by globalization, companies across the globe are expanding their geographical presence by entering new markets. Several industries have specific logistics requirements such as lower time-to-market for retail goods, build-to-order for electronic goods, and safe material handling practices for chemicals and pharmaceutical industries. This spurs the need for service providers that can offer logistics infrastructure management, manage demand-supply volatility, navigate through regulation complexities, and reduce inventory requirements.
A more detailed analysis is available in the procurement market intelligence report titled, ‘Global 4PL – Procurement Market Intelligence 2017’.
