Armstrong & Associates estimates that the global spare parts logistics (SPL) market rakes in over $52 billion every year, representing about 7% of total 3rd party logistics (3PL) revenue. Since its last case study on this logistic sector, the global spare parts logistics market between 2008 and 2016 saw a compound annual growth rate (CAGR) of over 5%.
The report outlines the global spare parts logistics estimates, which are further magnified to the region/country level and for many crucial market segments. The SPL market is driven by high-value manufactured goods and their servicing, specifically in the technological, industrial, and automotive verticals.
The automotive segment accounts for more than $18 billion, or around 34% of total spare parts logistics revenue. This is followed by the tech sector at $17.7 billion, or around 33.5%. The industrial segment accounts for about $11 billion, or around 21% of total spare parts logistics revenue. Healthcare and elements constitute smaller portions of the total revenue: $2.1 billion—4.0 percent and $3.9 billion, or 7.4 percent.
Shippers depend on 3rd party logistics company to fulfill short turn-around inventory supply order while reducing costs. To aid shippers’ spare parts management needs, 3PL companies provide services like warehouse management, transportation, parts and network planning, reverse logistics, inventory management, order fulfillment, and parts distribution. On top of this, some companies provide value-added services like field technician training, call center staffing as well as refurbishment and repair services. 3PLs meet shippers’ needs with their standardized processes, scalability, flexibility, analytics and reporting, value-added services, integrated IT solutions, and strategically positioned global networks.
For each of the 8 leading companies mentioned in the report – CEVA, SEKO, Ryder, Dachser, DB Schenker, DHL, FedEx, and UPS – the report describes cases studies, customers, technology supporting SPL activities, as well as industries and markets serviced. Network scope is also highlighted, with forward stocking locations and control towers.
UPS, for instance, has more than over 23,000 global UPS Access Points (with over 7,500 of these locations in the US), 5 global control towers, and over 1,000 forward stocking locations. Forward stocking locations are usually located within 2 hours from around 80% of the population. In Europe, about 99% of businesses are located within 4 hours of a UPS forward stocking location. Courier services can be used for next-flight out and same-day deliveries as needed.