Europe Third party Logistics Market By Service (Value added Logistics Services, International Transportation Management, Warehousing & Distribution, Dedicated Contract carriage, Domestic Transportation Management); By Transport (Waterways, Railways, Roadways, Airways); By End-Use (Automotive, Retail, Healthcare, Manufacturing, Others[);By Geography, Segment revenue estimation, Forecast, 2023-2030.

The third party logistics market size in Europe is expected to be worth USD 97.42 billion, with a compound annual growth rate of 9.13% from 2023 to 2028. Flexibility & Scalability Drive European 3PL Market is the need for adaptable logistics solutions that can grow with businesses.

 

Fulfillment is the most important component of e-commerce business success. Third-party logistics is a system whereby a third-party organization offers logistical services to businesses that require distribution and inventory management.

 

The growth of the 3PL market is being driven by the acceleration of globalization and the expansion of international trade. Businesses are implementing a range of software programs for inventory tracking, online documentation for international freight, real-time data, and warehouse management. Due to the region's improving economic conditions, increasing internet penetration, and the manufacturing sector's sustained expansion, the European 3PL market is expanding significantly. For example, according to The Manufacturing Organization UK, the United Kingdom ranked tenth globally for manufacturing revenue in 2019 with US$192 billion.

 

Europe's third-party logistics sector is fragmented, with many small and medium-sized businesses operating there. Kuehne + Nagel, DB Schenker, DHL Supply Chain, and XPO Logistics are major companies in this area.

 

 

Market Drivers

The rising e-commerce industry and the growing rate of international trade activities drive market growth.

• The rise in e-commerce calls for quick and effective logistics solutions throughout Europe. The e-commerce boom has undoubtedly played a major role in altering the logistics environment throughout Europe. In recent years, e-commerce has grown and evolved significantly throughout Europe. A number of variables, such as rising internet penetration, rising mobile usage, and shifting customer behavior, are responsible for the rise of e-commerce in Europe. According to the prediction, the e-commerce market in Europe is expected to generate a total revenue of 206.4 billion US dollars between 2024 and 2028, indicating a growth of 34.14 percent. The forecast suggests that the revenue will reach a new high of 810.96 billion US dollars in 2028, marking the sixth consecutive year of growth. Efficient and rapid logistics solutions are crucial to meet consumer expectations and sustain competitiveness in light of the growing trend of online shopping. Therefore, the rise of the e-commerce sector is accelerating the growth of third party logistics in Europe. 

 

• The increasing trade activities between European countries have led to an expansion in the demand for efficient and integrated logistics solutions. Third-Party Logistics providers play a major role in addressing this demand by offering their expertise, resources, and technology to ensure the smooth and cost-effective movement of goods across borders. In 2023, the value of products traded within the EU reached €3.8 trillion, accounting for 63% of all commerce within the EU. Similarly, the EU's total goods trade was valued at €6.03 trillion, demonstrating its substantial influence on the global trading environment. As international trade grows, 3PL providers will have a significant role in European logistics.

 

Restraints (Manpower Matters: Labor Scarcity Challenges European 3PL Providers)

• Complex regulatory environment: Due to the various customs, safety, and data protection rules among European nations, it can be difficult and costly for 3PL companies to operate seamlessly throughout the continent.

• There is a rising labor scarcity in the logistics industry, especially for specialized workers like warehouse employees and truck drivers. This can have an impact on 3PL providers' labor prices and operational efficiency.

 

Opportunity (Tech & Transport Join Forces: New Opportunities for European 3PL)

There is an increasing focus on stakeholder collaboration in the European 3PL sector. Collaboration between 3PL providers, IT firms, transportation providers, and retailers, in particular, fosters innovation, optimizes processes, and clears the path for a more streamlined and cohesive logistics environment. A more innovative, streamlined logistics ecosystem can be established in Europe through cooperation between 3PL providers and other stakeholders, including merchants, transportation providers, and tech firms. Major European 3PL provider DHL Supply Chain collaborated with tech behemoth IBM to install a cognitive warehousing solution in its distribution center located in the Netherlands. This partnership is an example of how technology businesses and 3PL providers may work together to promote innovation and optimize operations.

 

 

Market Segmentation (Tailored Solutions: How Segmentation Drives Growth in European 3PL)

The market for third party logistics is segmented on the basis of service, transport, end-use, and region.

By Service

• Value added Logistics Services

• International Transportation Management 

• Warehousing & Distribution

• Dedicated Contract carriage 

• Domestic Transportation Management

 

By Transport 

• Waterways

• Railways

• Roadways

• Airways

 

By End-Use

• Automotive

• Retail

• Healthcare

• Manufacturing

 

Europe's Logistics Landscape: A Regional Coverage Analysis

Europe

• Western Europe

  • United Kingdom

  • Germany

  • France

  • Italy

  • Spain

  • Benelux (Belgium, Netherlands, Luxembourg)

 

• Central & Eastern Europe

  • Poland

  • Czech Republic

  • Hungary

  • Romania

  • Austria

  • Nordic Countries (Sweden, Norway, Denmark, Finland)

  • Rest of Central & Eastern Europe

 

• Southern Europe

  • Portugal

  • Greece

  • Turkey

  • Rest of Southern Europe

 

 

E-commerce Boom Propels Domestic Transportation Management in Europe

On the basis of service, the domestic transportation management segment held a dominant position in the market. The growth of e-commerce, the need for quicker delivery, increased intra-regional trade, and technological developments such as transportation management systems (TMS) are the main drivers of this surge. DTM's emphasis on the effective domestic transportation of goods places it as a major driver in today's dynamic European logistics scene.

 

3PL services benefit the European manufacturing sector by boosting competitiveness and efficiency.

On the basis of end-users, the manufacturing sector contributed to a significant revenue share. The European manufacturing sector benefits greatly from the 3PL industry, which boosts its competitiveness and efficiency. 3PL suppliers provide knowledge of distribution, warehousing, and transportation management, freeing producers to concentrate on key tasks like manufacturing. They can give manufacturers a worldwide reach, lower prices, and flexibility and scalability. Despite this, Europe has led the world in manufacturing excellence; its manufacturing sector currently stands at 15.0% of GDP.

 

Germany Leads the Charge" positions Germany as the frontrunner in the European 3PL market

Germany dominates the European 3PL business, emphasizing sustainable supply chain solutions and excellent technology integration. It will be worth euro 37.49 billion by 2024 and euro 41.03 billion by 2028, growing at a 2.28% CAGR during 2024-2028. Germany is a preferred site for manufacturers due to its status as a regional center, which supports them from the nation's network of top shippers and third-party logistics providers (3PLs). During the next ten years, the rise of e-commerce and regional trade is predicted to fuel the demand for warehouse space, which has already increased during the previous ten years. 

 

German Giants Dominate Logistics Landscape: Deutsche Post, Deutsche Bahn, and Lufthansa Cargo

Deutsche Post (DHL), a German firm, is the largest logistics service provider in the world. Deutsche Bahn runs the largest rail network in Europe, while Lufthansa Cargo is one of the world's top international air freight firms.

 

Global Players, Local Expertise: Key Players in European 3PL

• AP Moller Maersk AS

• DB Schenker

• C H Robinson Worldwide Inc.

• Baltic Logistic Solutions

• CMA CGM SA Group

• Sanmina Corp.

• Deutsche Post AG

• FM LOGISTIC CORP

• FedEx Corp.

• GEODIS

• Kintetsu World Express Inc.

• United Parcel Service Inc.

• XPO Inc.

• Huktra UK Ltd.

• hansa express logistics GmbH

• Ital Logistics Ltd.

• ACP Freight Services Ltd.

• H. P. Therkelsen AS

• Imperial Logistics Ltd

• FourKites Inc.

• Jordon Freight Ltd.

• NTG Nordic Transport Group AS

 

 

Europe's Green Shift: Recent Developments in Sustainable 3PL

• In May 2023, Nippon Express, the world's seventh-largest third party logistics provider, agreed to buy Austrian logistics company Cargo-Partner for up to $1.5 billion. This move advances the company's goal of becoming a mega-freight forwarder with a global reach. The agreement greatly expands Nippon Express Group's air and ocean forwarding volume and fortifies its European network, particularly in the expanding manufacturing areas of the continent's central and eastern nations. 

 

• In May 2023, Macquarie Asset Management acquired two sites in the Netherlands for the Macquarie European Logistics Real Estate Fund, expanding its presence in the European logistics real estate sector. The facilities in Lelystad, purchased from MG Real Estate, & Rotterdam Logistics Park in Hellevoetsluis, acquired from Delta Development and ELREP Asset Management LLP, were bought through separate off-market procedures.