United Kingdom Third Party Logistics (3PL) Market Report and Forecast 2025-2034

The United Kingdom third party logistics (3PL) market size reached approximately USD 30.20 Billion in 2024. The market is projected to grow at a CAGR of 2.60% between 2025 and 2034, reaching a value of around USD 39.04 Billion by 2034.

Third party logistics providers are independent organisations that offer single or multiple logistics services to other businesses. This framework allows companies to outsource their supply chain activities such as inventory management and product distribution to specialised organisations.

Third party logistics providers perform a variety of functions, including inventory storage, packaging, warehousing, shipping, and distribution, among others. By outsourcing these services, organisations can benefit from cost-saving measures and flexible solutions tailored to their specific needs. Furthermore, the growing focus by businesses to minimise infrastructure costs and eliminate the need for storage and warehouse space, transportation, and shipment is aiding the United Kingdom third party logistics (3PL) market growth.

Third-party logistics companies, also known as 3PL or fulfillment providers, are crucial in the UK's supply chain. The logistics sector in the United Kingdom receives support from the government in the form of investments. For instance, in June 2023, the Department for Transport (DfT) announced £300,000 of government funding to support Generation Logistics, a campaign aimed at inspiring young people to pursue a career in the logistics industry.

Key Trends and Developments

Increasing cross-border trades, rise in employment opportunities, reduction in operating cost, and adoption of sustainable practices are the major trends impacting the United Kingdom third party logistics (3PL) market growth

United Kingdom Third Party Logistics (3PL) Market Trends

Due to the rise in e-commerce and trade activities, the demand for third-party logistics is expected to grow in the coming years. Favorable government regulations are also supporting the United Kingdom third party logistics (3PL) market expansion. Freight forwarders are consolidating their functions and services effectively by sharing centralised management facilities and logistic facilities to provide competent services.

Furthermore, third party logistics handles the supply chain and logistic operations of external businesses. By outsourcing fulfillment operations, customers of third-party logistics companies can save on investing in warehouse space, transportation, logistics labourers, distribution sites, retail outlets, e-commerce platforms, and logistics management software.

While a company may be a specialist in a particular industry with excellent product knowledge and customer relationships, managing the logistics of the supply chain is a completely different specialisation. Third-party logistics companies are supply chain experts who stay up to date on the best industry practices and developments. Their role is to help businesses ensure sustainable growth in terms of profitability and customer base, without the expense of physically expanding or relocating.

Cross-border trade is increasing due to more than 70 trade agreements signed by the UK with different countries. This facilitates the free flow of goods and services across borders, stimulating the growth of the United Kingdom third party logistics (3PL) market. Efficient integrated logistics services are required to export domestically manufactured goods, including transportation and logistics-related services management.

Market Segmentation

The report titled “United Kingdom Third Party Logistics (3PL) Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Mode:

• Roadways
• Railways
• Waterways
• Airways

Market Breakup by Services:

• Dedicated Contract Carriage (DCC)/Freight Forwarding
• Domestic Transportation Management (DTM)
• International Transportation Management (ITM)
• Warehousing and Distribution
• Value Added Logistics Services (VALs)

Market Breakup by End Use:

• Automotive
• Manufacturing
• Chemical
• Retail
• Healthcare and Pharmaceuticals
• Construction
• Others

The demand for 3PL services from the retail sector is expected to increase in the coming years due to their ability to facilitate convenience and ease for customers.

The retail sector holds a significant portion of the United Kingdom third party logistics market share. The United Kingdom's retail sector is continuously expanding due to untamed competition, multichannel strategies, and a rise in consumer demand. To adjust to these dynamics, retailers are embracing 3PL services to improve their customer services and gain a competitive edge.

The new era of e-commerce has changed the retail environment, further driving the demand for optimal 3PL services. Meanwhile, the automotive industry in the UK is renowned for premium and sports car marques including Aston Martin, Bentley, Caterham Cars, Daimler, and Jaguar. This also requires a robust supply chain, including third-party logistics.

Competitive Landscape

Major players in the United Kingdom third party logistics (3PL) market are focusing on decarbonisation amid the rising trend of sustainability:

Other players in the United Kingdom third party logistics (3PL) market are XPO, Inc., Yusen Logistics Co., Ltd., FedEx Corporation, Fidelity Supply Chain Solutions, and PostNord AB, among others.

In October 2023, Kuehne+Nagel UK partnered with the UK Government's £200 million 'Zero Emission HGV and Infrastructure Demonstrator Programme' to help the UK achieve its net-zero goals by transitioning heavy goods vehicles to operate with zero emissions. This initiative is in collaboration with Innovate UK, and it would bring approximately 370 zero-emission trucks and around 57 refueling and electric charging sites via four consortiums. Kuehne and Nagel's involvement is expected to play a vital role in decarbonising the UK's haulage sector.