Third- party logistics (abbreviated 3PL, or sometimes TPL) in logistics and supply chain management is a company 's use of third- party businesses to outsource elements of the company 's distribution and fulfillment services.
Third- party logistics providers typically specialize in integrated operation, warehousing and transportation services which can be scaled and customized to customers' needs based on market conditions, such as the demands and delivery service requirements for their products and materials. Often, these services go beyond logistics and include value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. When this integration occurs, the provider is then called a third- party supply chain management provider (3PSCM) or supply chain management service provider (SCMSP). 3PL targets particular functions within supply management, such as warehousing, transportation, or raw material provision.
The global 3PL market reached $750 billion in 2014, and grew to $157 billion in the US; demand growth for 3PL services in the US (7.4% YoY) outpaced the growth of the US economy in 2014., As of 2014, 80 percent of all Fortune 500 companies and 96 of the Fortune 100 used some form of 3PL services.
The global third- party logistics market is predicted to grow at around 5 percent CAGR during 2016 to 2024 (forecast period). Its companies operate for the shipping industry to supervise logistic undertakings (forecasting, warehousing, & conveyance management software ). The market will attain a size of about USD 1, 054 billion by 2024.
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