According to new research published by Allied Market Research, the global third-party logistics market is expected to reach $1.11 trillion, registering a compounded annual growth rate (CAGR) of 5.16 percent during the forecast period of 2016 to 2022.

Third-party logistics constitutes outsourced activities related to logistics, including warehousing and distribution. 3PL services also include value addition to the entire process from procurement of goods to the distribution of finished products to consumers and establishing an effective and efficient supply chain. Advanced IT solutions such as electronic data interchange and vendor managed inventory are enhancing the growth of 3PL market.

In 2015, Asia Pacific accounted for the largest revenue share of about 36 percent, followed by North America.

The world 3PL market is poised to grow significantly during the forecast period due to increases in ecommerce and trade activities globally and the trend among manufactures and retailers to reduce their costs. Government regulations are also increasing the demand of 3PL across various industries.

Among the study’s findings, the increase in free trade agreements is influencing the 3PL market. Asia Pacific is expected to be the largest as well as fastest growing region and would grow at a CAGR of 6.67 percent during the forecast period. India is anticipated to grow at the highest CAGR of 8.13 percent during the forecast period.

Growth in trade activities around the globe and the increase in the ecommerce industry have led to an increase in the number of 3PL companies. Technological advancement and use of IT solutions are expected to drive the market during the forecast period. IT services and logistics software are expected to register a growth of 5.72 percent to 2022.