South Korea Third-Party Logistics (3PL) Market Research Report: Forecast (2024-2030)

Market Definition

Third-party logistics is a business that specializes in handling various aspects and operations of the supply chain of outsourced logistics services such as distribution, warehousing, and fulfillment, for multiple industries on a contractual and non-contractual basis.

Market Insights & Analysis: South Korea Third-Party Logistics (3PL) Market (2024-30):

The South Korea Third-Party Logistics Market size is valued at around USD 18.5 billion in 2024 & is estimated to reach around USD 32 billion by 2030. The market is also expected to grow at a CAGR of around 9.8% during the forecast period, i.e., 2024-30. The market in South Korea is experiencing robust growth driven by economic recovery, a rise in industrial production, an increase in consumer, and overall expansion in various industries such as manufacturing, healthcare & pharmaceuticals, retail & e-commerce, automotive, consumer goods, food & beverages, etc. Such developments in the economy and across industries will boost the growth of 3PL services in the country. The services offered by 3PL in South Korea include transportation management, warehousing & distribution, dedicated contract carriage, logistics software, and others, these services are necessary for these industries due to their objective of achieving operational efficiency.

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Moreover, the rapid rise in e-commerce platforms has propelled the market growth. The prospects associated with market growth improve further as the country is a developed economy with well-developed infrastructure and a skilled workforce, and the availability of the online payment medium adds reliable aspects to the value chain. Additionally, advancements in technologies such as data analytics, machine learning, Internet of Things (IoT), robotics, cloud computing, and artificial intelligence (AI) present the market an opportunity to further improve their operational efficiency, and reliability, and add value to the supply chain.

Additionally, structural challenges such as an increasing elderly population, falling fertility rate, and declining population present significant obstacles to market growth & expansion, as logistics is a human capital-intensive industry. Also, the decline in the population will negatively impact the productivity, demand, and consumption in the country negatively impacting the market. The adoption of automated AI robots can solve part of the problem and the possible adoption of a skilled immigrant policy as proposed by the OECD to its member countries to mitigate these scenarios. Overall, the recovery in the global economy and the economy of South Korea presents significant growth prospects for the market in the country that is situated near two giant economies.

South Korea Third-Party Logistics (3PL) Market Driver:

Rise in the E-Commerce Industry – South Korea is certainly one of the biggest e-commerce markets globally pushing third-party logistics boom in the country because of the need for dependable logistics and fulfillment partners. The expansion in the e-commerce sector is primarily due to the excessive penetration of smartphones, high-speed internet, and the presence of dependable online payment programs in the country.

The growth in e-commerce in the country and the want to fulfill the developing demands of the e-commerce systems provide the 3PL players with an extraordinary possibility to provide their services which include inventory and transportation management, warehousing & distribution, dedicated agreement carriage, logistics software, and others. The unfolding of such situations offers the 3PL Market to stay properly poised to fulfill the increasing need in this evolving situation offering massive growth during the forecast period.

South Korea Third-Party Logistics (3PL) Market Opportunity:

The Boom in Renewable Energy to Offer Lucrative Growth Opportunities – South Korea has set the target to reduce its carbon emissions by 2030, to meet this, the government wants to increase its renewable energy sector to 22% of the power generation. The sudden push to meet its commitment will have a transformational effect on the Korean economy resulting in the opening of new avenues for supply chain and logistics that need to be filled. These sectors will increase the economic activity in the country by boosting the manufacturing and production of key components necessary for renewable energy generation, leading to increasing requirements of the 3PL. These include the transportation of solar panels to wind turbines or simply the components and raw materials used in their making. Such development in the economy presents ample opportunities to drive the future growth of South Korea's third-party logistics industry in the coming years.

South Korea Third-Party Logistics (3PL) Market Challenge:

Rapidly Declining Population to Impede Market Growth – The Republic of Korea is facing a rapid decline in its population, with the growing older population and the falling fertility rates having a long-term structural impact on the country. For instance,

• In July 2024, The OECD Korea report highlights that from the current 51.5 million population in 2024 to 47.4 million by 2050. Additionally, the demography will comprise mostly elderly people in the country.

Such scenarios will lead to a fall in economic activity in the country and the government will be forced to make a significant social expenditure in the future de-voiding expenditure for economic growth. This fall in economic activity will impact consumption in the country impacting the market size and growth of the third-party logistics industry in South Korea. However, such development can be mitigated by the proper public policy implementation such as the usage of AI-enabled robots, and welcoming the skilled immigrants in the country.

South Korea Third-Party Logistics (3PL) Market Trend:

Increasing Adoption of Eco-Friendly Packaging – The upward thrust in global warming because of carbon emissions and phenomena like weather change has pulled the world's focus towards adopting environment-friendly products and services. Industries are making innovations in their product and services to align with this trend. Additionally, countries like South Korea have set a target to lessen 40% of their emissions from the 2018 levels by 2030 and turn out to be net zero through 2050, pushing the industries in the country to conform to such changes and reduce their emission levels as well. The third-party logistics sector is changing to eco-friendly packaging materials and zero-waste policy to align with the trend, leading them to take steps in growing a form of circular economy where companies will recycle or reuse their packaging materials which can be bio-degradable. For this companies are patterning with other companies with such capabilities, for instance,

• In April 2023, LG Corporation in its press release highlighted that a MoU was signed between CJ Logistics and LG Chem under which LG Chem will collect and recycle the packaging wraps used in the logistics centers of CJ Logistics across the country.

South Korea Third-Party Logistics (3PL) Market (2024-30): Segmentation Analysis

The South Korea Third-Party Logistics Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the national level. Based on the analysis, the market has been further classified as:

Based on Transportation Mode:

• Rail
• Road
• Air
• Sea

For the South Korean third-party logistics industry, based on the transportation mode, freight transportation by road remains the dominant segment and will continue to be over the forecasted period as well. This is primarily due to the extensive road network present in the country and the majority of the population in the country is concentrated in its cities which are the driving forces of their economy.

Based on Solution:

• Transportation management
• Warehousing & distribution
• Dedicated contract carriage
• Logistics software
• Others

The transportation management segment holds the largest share in South Korea Third-Party Logistics Market, primarily due to South Korea being an export-oriented economy depending on global trade for its economic growth. Also for proper inventory management industries majorly follow just in time approach or already have a built inventory capacity for their production waiting to be delivered. The task of delivering these products falls on the third-party logistics service providers, leading to higher revenue growth in transportation management. Such scenarios will drive future segmental revenue growth during the forecast period.

South Korea Third-Party Logistics (3PL) Industry Recent Development:

• In July 2024: Hyundai Glovis acquired an LNG carrier for its fleet as the company ventures into the LNG transportation business. The vessel is 292 meters long and carries a capacity of 174,000 cbm of liquefied gas. The said capacity is enough to fulfill half of the country's daily LNG consumption.

Gain a Competitive Edge with Our South Korea Third-Party Logistics (3PL) Market Report

1. South Korea Third-Party Logistics (3PL) Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
3. South Korea Third-Party Logistics (3PL) Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

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