E–commerce is the fastest growing Third-Party Logistics (3PL) Market segment

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The FINANCIAL —  to Armstrong & Associates, Inc. (A&A’s) newest report “Rising Tide: The Rapid Growth of E-Commerce Logistics, 3PL Solutions, Last-Mile Delivery, and the Dominance of Amazon,” the Census Bureau of the U.S. Department of Commerce reported adjusted retail e-commerce sales in the second quarter of 2020 of $211.5 billion, a COVID–19 driven increase of 31.8% from the first quarter of 2020, and a whopping 44.5% increase from the second quarter of 2019. E-commerce retail now represents 16.1% of retail sales in the United States. The segment grew at a 14.6% Compound Annual Growth Rate (CAGR) from 2015 through 2019 and shows no sign of slowing.

Growing e-commerce sales are driving up U.S. e–commerce logistics costs with a 19.9% CAGR expected through 2020. E–commerce logistics costs currently account for 9.9% of total U.S. logistics costs.

E–commerce is the fastest growing Third-Party Logistics (3PL) Market segment. Retailers are increasingly relying upon Amazon and Third–Party Logistics Providers (3PLs) to help manage omnichannel and e–commerce supply chain operations. U.S. 3PL e–commerce revenues reached $43.4 billion in 2019, and we expect 28% growth through 2020 as e–commerce purchases continue to expand during the pandemic and companies continue to outsource logistics activities. With its dominant position, Amazon’s operations boast an estimated 60% market share of the U.S. E-Commerce 3PL Market segment.

The report covers the growth of e-commerce logistics in the U.S., e-commerce fulfillment and last-mile delivery, third-party logistics provider alternatives to Amazon, Amazon’s leading market position, and an “apples-to-apples” cost comparison between Fulfillment by Amazon (FBA) and 3PL solutions using our proprietary e-commerce fulfillment pricing benchmarks from 21 3PLs representing over 1,000 customers.

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