The 3PL market is expected to increase from $219 billion in 2025 to $228 billion in 2026, reflecting a maturing cycle of shippers rebalancing service portfolios toward third-party logistics providers, according to Mordor Intelligence.
What's more is, the rise of digital logistics startups and technology-driven freight platforms offering AI-enabled optimization, cloud-native logistics management, real-time tracking, and automated documentation is reshaping the competitive landscape, according to Global Market Insights.
Food Logistics talked to a number of past recipients from the Top 3PL & Cold Storage Providers award about the State of the 3PL market and what's in store for cold chain shippers in the future.
{This is Part 4 of a multi-part series in the State of 3PL & Cold Storage Providers Report. CLICK HERE to read Part 1. CLICK HERE to read Part 2. CLICK HERE to read Part 3}.
Traceability and visibility for the win
One area that continues to gain importance in food logistics is traceability and accountability across the yard and facility.
"As regulatory requirements tighten and customers demand greater transparency, the ability to accurately track product movement, dwell time, and chain of custody is becoming critical. Gaps in visibility, especially in the yard, can create risk not only from an operational standpoint, but also from a compliance and audit perspective," says Erin Mitchell, COO of YMX Logistics.
What's more, customer expectations have shifted toward integrated, tech-enabled solutions with greater visibility and flexibility, adds Scott Ginn, VP operations, Transervice.
"Rising costs and regulatory complexity are driving a shakeout, where less efficient providers struggle to compete. As a result, the gap between high-performing and underperforming 3PLs is rapidly widening," Ginn adds.
Technology is raising the floor, not the ceiling, making visibility and automation tools table stakes, says Matt Heroux, president, Fresh Freight.
“The ceiling is still set by people: the carrier relationships, the exception management, the proactive communication. That is where the best 3PLs still separate themselves,” he adds. “Winning 3PLs own the outcome. When something goes wrong, they have a recovery plan before the shipper has to ask. Losing 3PLs send an email and wait.”
Modernizing, innovating and evolving
3PLs are operating in an environment defined by increasing complexity, interconnectedness and heightened expectations, says Bryan Verbarendse, president, Americas, Americold.
"Providers are diversifying beyond traditional services, investing in digital capabilities to improve visibility and execution, and responding to growing demands for sustainability, safety and operational accountability. Leading 3PLs are modernizing infrastructure, expanding into new industries and raising standards for safety, efficiency, reliability and transparency. One area worth highlighting is how the cold chain is continuing to evolve beyond traditional capacity models. Across the industry, we’re seeing a shift toward intentional network design and strategic partnerships as essential tools for navigating volatility and long-term growth."
Technology has also become a key differentiator.
“Capabilities like real-time and remote monitoring, data integration, and AI-driven decision-making are no longer ‘nice to have,’ they’re essential for winning business,” says Kyle Johnson, CEO, Leonard’s Express. “The 3PLs that are investing in these are finding ways to offset rising costs and offer more strategic value.”
But, while the growth opportunity for 3PLs is significant, it does require a willingness to move beyond traditional service models, according to Aidan McCauley, president of Dawsongroup tcs USA.
“The most immediate opening is in localized, value-added services. 3PLs that can offer on-site tempering, blast freezing or ultra-low temperature storage down to -80°C closer to the end-user will have a significant competitive advantage. Proximity to the point of need is increasingly what separates good cold chain operators from great ones,” he adds.
Compliance and partnerships go hand in hand
Nearly 89% of shippers agree their relationships with their 3PL partners are successful, according to the findings released by the Council of Supply Chain Management Professionals (CSCMP)’s annual State of Logistics Report, created in conjunction with Kearney and presented by Penske Logistics. And, 82% report that 3PLs contribute to improved customer service.
“That number matters because it reflects a real change in what 3PLs have become,” says Jim Jelinek, president of warehousing, Roadtex, an Echo Global Logistics company. “The best providers today aren’t simply executing freight moves; they’re functioning as embedded extensions of their clients’ supply chain teams, delivering technology, market intelligence, and analytical capability that most shippers couldn’t build cost-effectively on their own.”
For some food and beverage processors, it's more about the 3PL partnership than anything. That's because when a brand outsources fulfillment, the 3PL becomes the final touchpoint in the customer experience, says Warner Siebert, chief revenue officer, ColdTrack.
"A single mispick can result in significant customer churn, and repeated errors can permanently damage brand loyalty. Top-performing providers design their operations around consistency, accountability, and precision. They invest in systems, processes, and training that minimize error and ensure that every order reflects the brand’s standards.”
Retailer compliance is also a critical — and often underestimated — component of success for food and beverage brands operating in the U.S. market, according to Raul Villarreal, CEO, Source Logistics.
"Major retailers have strict routing guides, labeling requirements, delivery windows, and standards, and even small deviations can result in significant chargebacks, delays, or rejected shipments, especially if the product is being imported into the U.S.," he adds. "For food and beverage companies, the stakes are even higher due to added complexity around expiration dates, lot traceability, and product integrity. Working with a partner that specializes in retailer compliance helps ensure these requirements are executed consistently and accurately at scale."
A growing concern for California-based 3PLs in particular is the rise of litigation related to the Private Attorneys General Act (PAGA) and wage-and-hour claims, which authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of the State of California for Labor Code violations.
“Over the past decade, these cases have increased significantly, creating substantial financial and administrative burdens for businesses of all sizes. Because PAGA actions are brought on behalf of the State of California, companies must incur significant legal expenses to defend themselves, regardless of the merits of the claims. Addressing this issue is essential to preserving jobs and maintaining a healthy business environment in the state,” says William "Brad" Thayer, president and CEO, DSW Distribution Centers, Inc.
Furthermore, the recent FMCSA rulings, combined with broader political and regulatory upheaval, have created what is now considered a carrier- and broker-driven market.
“And not every 3PL will survive this transition,” says Michael Cherney, CEO, Cooler Logistics. “Customer expectations are higher than ever; shippers want service-focused partners with real solutions, not just capacity. Food safety compliance and temperature integrity remain non-negotiable in cold chain logistics. As capacity tightens and new carriers enter the market, vetting standards become even more critical.”
Looking ahead
When the market turns, 3PLs with thin margins, weak carrier networks, and shallow shipper relationships will get exposed quickly, adds Rick LaGore, CEO, InTek Logistics.
“The separation is already happening. This is not a scale game right now. It is an execution game,” he says. “There is a real difference between a true intermodal marketing company with direct contracts with Class 1 railroads and a 3PL accessing intermodal through a door program or another intermediary. The difference shows up in execution. Ask how your 3PL handles drayage failures. That answer will tell you more about a 3PL’s actual service capability than any presentation.”
The market is forcing 3PLs to become more disciplined, more data-driven, and more specialized, adds Mike Jarrett, founder and CEO of Jarrett.
“Longer term, the outlook remains positive because the underlying need for outsourced logistics expertise is not going away. Supply chains are becoming more complex, fulfillment expectations are rising, and customers need partners that can handle transportation, warehousing, traceability, and disruption management as an integrated service. That creates room for strong 3PLs to grow, even if the path requires more operational rigor than it did a few years ago. So, from our vantage point, the industry is in a sorting phase. Companies with strong execution, smart infrastructure, and clear customer value will emerge stronger. Companies that are slow to modernize will find it increasingly difficult to compete,” he adds.
And, because not all 3PL models are created alike, “providers with tightly integrated operations, strong technology platforms, and direct ownership and control over operational execution are better positioned to deliver consistent results in a complex and rapidly changing environment,” adds Siebert.
Case in point: 3PLs are in a state of survival, from where Jason Minghini, SVP, supply chain solutions at Kenco, sits.
“Growth has become more stagnant as companies navigate continued economic uncertainty and inflationary pressure. As a result, many providers are focused less on expansion and more on filling available space and absorbing fixed costs, often at much thinner margins than in the past,” he adds. “Looking ahead, this environment will likely drive increased consolidation across the 3PL landscape, as well as a greater emphasis on flexible, agile, and cost‑efficient operating models. The providers that are able to adapt to these pressures while maintaining operational resilience will be the ones best positioned to navigate what comes next.”
Nick Mandich, partner, Cold-Link Logistics, remains bullish on the long-term outlook for the 3PL industry.
"While some new capacity has recently come online, development activity has slowed significantly, with construction starts near historic lows. As a result, the pipeline of new inventory is limited. Over time, continued demand and absorption will tighten available capacity, giving operators more pricing power and driving growth across the industry," he adds.
For Felipe Capella, co-founder and CEO, Loadsmart, the 3PL industry is in a period of division and the dividing line is becoming harder to straddle.
“On the freight market side, we have been consistent in our view: no dramatic recovery was coming, and that has played out. Rather than a sharp snap-back, conditions have improved incrementally — a few basis points per quarter as excess capacity has slowly exited the market. The market is now approaching normalization. Spot freight is tracking back toward historical levels, around 15% of total volume, and the dramatic volatility of 2021 through 2023 is largely behind us,” he adds. “But normalization is not growth. Demand remains weak, and the capacity reduction we've seen hasn't been absorbed at the rate that would push rates meaningfully higher. We're in a fragile equilibrium — if demand strengthens from consumer spending, industrial production, or inventory rebuilding, the market could tighten faster than the gradual quarterly improvement we've experienced. If demand weakens further, 3PLs relying on market tailwinds for revenue growth will be exposed.”
Whatever the viewpoint on the future of the 3PL market, the current state of 3PLs should allow for growth especially with customers looking for dedicated solutions, according to Jim Anderson, division VP, Lily Transportation.
“Carriers that are focused on the final consumer and embrace the technologies that are available in the industry will excel in the current market while also proving the ‘value’ to the customers, which would allow them to weather any downturns,” he notes.
