The global third party logistics (3PL) market is projected to exceed $1 trillion by 2022 at an annual average growth rate of 4.4 percent.

That’s the assessment of a new study from Global Market Insights, a global market research and consulting service provider headquartered in Delaware.

Companies outsource logistics operations to 3PL providers to reduce their operating costs and concentrate on core competencies, the study noted. Effective 3PL providers prescribe timely and effective supply chain solutions at optimized transportation costs. The proliferation of ecommerce is also anticipated to further the industry demand.

Among 3PL segments, software services are projected to hit $30 billion at a growth rate of 6.5 percent up to 2022. “Rapid adoption of software and latest IT applications to improve distribution coverage and provide quality service to the customers is likely to boost growth,” the report said.

Omnichannel distribution is forecast to grow thanks to the rise of online marketing services.

International Transportation Management is expected to exhibit significant gains in the near future, according to the report. Domestic Transportation Management is also projected to see strong growth by 2022. Pharmaceuticals, refrigerated cargoes, and groceries are all projected to contribute to the growth of this sector over the projected time frame.

The Asia Pacific 3PL industry will hit $385 billion at a growth rate of over five percent from through 2022, according to the report. The European 3PL market is also expected to witness a substantial growth due to rising demand from life sciences and the automotive industry sector in the next few years. North America is expected to be worth $265 billion during the forecast period.