Canada 3PL Market Growth Driven by Focus on Core Competencies and E-Commerce Advancements
The Canada third-party logistics (3PL) market is experiencing significant growth as manufacturers and retailers increasingly focus on their core competencies and capitalize on advancements within the e-commerce industry. Third-party logistics encompasses outsourced activities related to managing the flow of goods in a company’s supply chain, including the delivery of products from manufacturers to consumers. These services extend beyond basic logistics, adding value from procurement through to distribution, thus establishing a highly efficient supply chain.
William Carlin
03 Sep 2024 3:10 PM
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Market Dynamics and Growth Opportunities
According to Allied Market Research, the Canada 3PL market is expanding as businesses prioritize core competencies and leverage e-commerce developments. The market is driven by the increased adoption of IT solutions, multi-mode systems for cost-cutting and lead time reduction, and strategic partnerships with end-users. However, challenges such as the risk to manufacturers' goodwill and limited control over logistics services pose potential barriers. Despite these challenges, the market is poised for growth, with new opportunities arising from technological advancements and strategic alliances.
Key Market Segments and Growth Projections
The 3PL market is segmented by mode of transportation, with the airways and railways segments expected to see significant compound annual growth rates (CAGR) of 11.1% and 10.4%, respectively, over the forecast period. In 2019, these segments collectively accounted for 29.1% of the market share and are projected to reach 32.5% by 2027.
In terms of transportation modes, the roadways segment held the largest market share in 2019, representing nearly half of the market. Meanwhile, the airways segment is anticipated to exhibit the highest CAGR of 11.1% during the forecast period. The health and nutrition sector dominated the market in 2019, contributing nearly half of the overall market share, while the beauty and cosmetics segment is expected to register the highest CAGR of 10.3% through the forecast period.
Major Players in the Canada 3PL Market
The Canada 3PL market is highly fragmented, with numerous participants, many of which operate primarily within the domestic market. Key players profiled in the market report include A.P. Moller-MAERSK, Penske, United Parcel Service, Kintetsu World Express, FedEx Corporation, SCI Group Inc, C.H. Robinson Worldwide, Nippon Express Co., Bollore Group, and Purolator Inc.
Industry Challenges and Future Outlook
The 3PL market faced slow growth in 2020, attributed to the negative impact of COVID-19 on demand and supply, particularly affecting sectors such as home decor, health & nutrition, beauty & cosmetics, pet products, and sports & recreation. However, the market outlook remains positive, driven by factors such as growing urbanization, evolving domestic and international trade activities, and a rising trend of outsourcing transportation services.
Canada continues to be a leading consumer of third-party logistics services globally, with ongoing focus on core competencies among manufacturers and retailers likely to bolster 3PL activities. The beauty and cosmetics, along with health and nutrition segments, remain key growth areas within the market, with significant potential for future expansion.
For more detailed insights and reports, visit Allied Market Research.
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