South Korea Third-Party Logistics (3PL) Market Outlook - Forecast Trends, Market Size, Share and Growth Analysis Report (2024-2032)

South Korea Third-Party Logistics (3PL) Market Growth

The rising integration of analytics in 3PL operations is one of the key trends boosting the South Korea third-party logistics (3PL) industry growth. These analytic capabilities are geared towards gathering critical insights to improve the operation and generate maximum client satisfaction. These insights can aid the 3PL providers in enhancing end-to-end visibility in their supply chain operations. Furthermore, several market players have implemented last-mile delivery options in their services to gain a competitive edge in the market.

The South Korea third-party logistics (3PL) market dynamics and trends are driving various providers to adopt sustainable practices in their supply chains to appeal to environmentally conscious shippers. For instance, practices such as route optimisation can determine the shortest delivery route and reduce the carbon footprint, and the usage of alternative fuel options as well as electric vehicles can minimise the overall emission.

South Korea Third-Party Logistics (3PL) Market Analysis

The rapid rise in e-commerce, globalisation, and growing demand for cost-saving logistics solutions are some of the major factors boosting the market growth. Several businesses are harnessing third-party services for the efficient handling of large inventories, offering timely deliveries and handling operations during peak periods, saving them resources and time. These companies are increasingly depending on third-party logistics providers for help with cross-border logistics documentation and customs clearance, which is driving the South Korea third-party logistics (3PL) market demand.

Moreover, third-party logistics often invest in high-end technologies and infrastructure and offer superior service at a lower price compared to companies that are sourcing their logistics business. This approach enables companies to concentrate on their core competencies rather than spending time on non-essential functions like logistics, thereby fuelling the South Korea third-party logistics (3PL) demand growth.

South Korea Third-Party Logistics (3PL) Industry Outlook

According to industry reports, in South Korea, online retail constituted 18.4% of total retail sales in 2017, with offline sales making up 81.6%. By 2021, the share of online sales had risen significantly to 29.6%, indicating a shift towards e-commerce and a decline in offline sales to 70.4%. In 2022, online sales were at 25.9%, while offline sales were at 74.1%. For 2023, online retail accounted for 24.9% of sales, with offline sales at 75.1%. The trend is anticipated to stabilise in 2024, with online sales at 24.8% and offline sales remaining steady at 75.2%. This balance is expected to boost the South Korea third-party logistics (3PL) market revenue, as the rise in online sales necessitates efficient logistics and supply chain management to manage higher order volumes and ensure prompt delivery.

According to World Bank Data, South Korea's health expenditure was 8.2% of GDP in 2019. This figure rose slightly to about 8.4% in 2020. The most notable rise occurred between 2020 and 2021, with health expenditure soaring to 9.33% of GDP. This increase has driven the growth in the South Korea third-party logistics (3PL) industry revenue by supporting the healthcare sector in managing the intricate logistics of medical supplies, pharmaceuticals, and equipment.

South Korea’s advanced transport and logistics infrastructure boosts the efficiency and reliability of 3PL services, thus, fuelling growth of the South Korea third-party logistics (3PL) market.

• High adoption of technology and automation streamlines operations and improves service quality.
• Positioned as a key gateway in East Asia, facilitating international trade and connectivity.

Intense market competition can compress profit margins and create barriers to entry for new players.

• Rising operational costs and logistics expenses can impact profitability and service pricing.
• Complex regulations and compliance requirements may create operational hurdles.

The growth in online retail is boosting the need for efficient 3PL solutions, creating opportunities in the South Korean third-party logistics (3PL) market.

• South Korea’s growing trade partnerships offer new business opportunities for 3PL providers.
• Rising focus on green logistics and sustainable practices can create new market niches.

Economic downturns can reduce demand for logistics services.

• Global supply chain issues and geopolitical tensions may impact operations.
• Rapid technology changes require constant investment and adaptation.

Key Players in the South Korea Third-Party Logistics (3PL) Market and Their Key Initiatives

Deutsche Post AG

• Launched GoGreen Plus service.
• Invested over €2 billion in digitalization projects.

Nippon Express Co., Ltd.

• Implemented WMS to enhance inventory control.
• Introduced cross-docking to streamline the delivery process.

United Parcel Service of America, Inc.

• Launched UPS Supply Chain Symphony™.
• Invested in alternative fuel vehicles and eco-friendly packaging solutions.

C.H. Robinson Worldwide, Inc.

• Opened a new office in Beijing to enhance service accessibility in Asia. 
• Leveraged Navisphere technology

South Korea Third-Party Logistics (3PL) Industry Segmentation

“South Korea Third-Party Logistics (3PL) Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Service

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

Market Breakup by Industry Vertical

• Food and Beverage  
• Automotive  
• Consumer and Retail  
• IT Hardware and Telecom 
• Healthcare  
• Energy  
• Others

South Korea Third-Party Logistics (3PL) Market Share

In the South Korea third-party Logistics (3PL) market, the domestic transportation management (DTM) segment holds a significant share. DTM services, often combined with freight brokers, manage shipments from origin to destination.

The segment's growth is driven by higher fuel surcharges, increasing carrier costs, more cross-docking services, and greater trade movement between unloading docks and warehouses. Additionally, rising consumer demand in sectors such as healthcare and retail, along with steady GDP growth in South Korea, is further propelling the growth of the South Korea third-party Logistics (3PL) industry.

Leading Companies in the South Korea Third-Party Logistics (3PL) Market

The companies provide diverse services like parcel delivery, freight forwarding, and supply chain management.

• Deutsche Post AG  
• Nippon Express Co., Ltd. 
• United Parcel Service of America, Inc. 
• C.H. Robinson Worldwide, Inc. 
• Yusen Logistics Co., Ltd. 
• FedEx Corp. 
• Schenker AG 
• DSV A/S 
• CJ Logistics Corporation 
• LX Pantos Co., Ltd. 
• Jupiter Express Co.