The global logistics market size was valued at $9,833.8 billion in 2022, and is projected to reach $16,794.7 billion by 2032, growing at a CAGR of 5.6% from 2023 to 2032.
Report Key Highlighters:
- The logistics market analysis study covers 17 countries. The research includes a segment analysis of each country in terms of value ($billion) for the projected period 2023-2032.
- The study incorporated research methodology aims to present a comprehensive outlook on global markets and aid key stakeholders & players in making well-informed decisions to accomplish their ambitious growth goals.
- Over 1,500 product literatures, industry statements, annual reports, and other comparable materials from major logistics industry participants were reviewed to gain a better understanding of the market.
- The logistics market is fragmented, with several players including A.P. Moller–Maersk, C.H. Robinson Worldwide, Inc., DB Schenker, Deutsche Post AG (DHL Group), DSV, FedEx, Geodis, Kuehne+Nagel, Nippon Express, and United Parcel Service, Inc. Also tracked key strategies such as acquisitions, product launches, developments, partnership, mergers, expansion etc. of the players operating in the logistics industry.
Logistics is widely known as the process of coordinating and moving resources, such as equipment, food, liquids, inventory, materials, and people, from one location to the storage of the desired destination. It is the management of the flow of goods from one point of origin to the point of consumption, to meet the requirements of customers. Logistics management focuses on the efficiency and effective management of daily activities concerning the production of the company’s finished goods and services. This type of management forms a part of the supply chain management; and plans, implements, & controls the efficient, effective forward, reverse flow, and storage of goods. Logistics mainly comprises various services such as Third-Party Logistics (3PL), Fourth-Party Logistics (4PL), inbound logistics, outbound logistics, reverse logistics, green logistics, construction logistics, digital logistics, military logistics, and others logistics services.
Factors, such as the growing e-commerce industry coupled with rise in reverse logistics operations and rise in trade related agreements, fuel the market growth. In addition, rise of tech-driven logistics services and growing adoption of IoT-enabled connected devices are also expected to drive the market growth. However, lack of control of manufacturers on logistics service, poor infrastructure, and higher logistics costs hinder the market growth. Further, the emergence of last mile deliveries, logistics automation, and cost cutting & lead time reduction due to adoption of multi-modal system are some of the factors that are anticipated to foster the market growth.
The market is segmented on the basis of mode of transport, end use, and region. On the basis of mode of transport, the market is divided into railways, airways, roadways, and waterways. On the basis of end use, it is categorized into healthcare, manufacturing, aerospace, telecommunication, government & public utilities, banking & financial services, retail, media & entertainment, technology, trade & transportation, and others. On the basis of the model, it is classified into 1 PL, 2PL, 3 PL, and 4 PL. Region-wise, it is studied across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific logistics markt is the highest revenue contributor followed by North America logistics market.
The key players operating in the logistics industry are A.P. Moller–Maersk, C.H. Robinson Worldwide, Inc., DB Schenker, Deutsche Post AG (DHL Group), DSV, FedEx, Geodis, Kuehne+Nagel, Nippon Express, and United Parcel Service, Inc.
Growing e-commerce industry coupled with rise in reverse logistics operations
E-commerce refers to the buying and selling of goods by using internet. Third-party logistics service providers encompass shipping of products to consumers. In addition, the e-commerce industry uses logistics service to manage and oversee the supply chain of e-commerce companies, which permits these companies to focus on marketing and other business strategies. Thus, due to several benefits offered by logistics to the e-commerce industry, adoption of logistics service is surging at a considerate rate, which is driving the growth of the digital logistics market overview. For instance, according to the report by the UN’s trade and development body (UNCTAD) published on April 2020, e-commerce sales hit $25.6 trillion globally in 2018, which was equivalent to 30% of the global gross domestic product (GDP). The value of global B2B e-commerce in 2018 was $21 trillion, representing 83% of all e-commerce, whereas B2C e-commerce was valued at $4.4 trillion. The growth is attributed to fast growth in consumers and cross-border purchases. According to a report, more than 1.4 billion people shopped online in 2018 while the U.S., China, and Japan dominate e-commerce sales to consumers.
Rise in trade related agreements
Dynamic market conditions and improvement in the global economy are the key factors driving globalization. Attributed to rise in globalization, various activities related to trade are witnessing increase. Therefore, it is becoming difficult for manufacturers or retailers to keep track of these activities in an efficient manner. This factor is expected to drive the logistics market share of logistics companies. Moreover, development of the overseas market is a significant factor that fuels the growth of the market. Logistics services are becoming extremely vital for price-sensitive customers who require a wider choice of high-quality products with timely delivery. Thus, increase in trading activities due to globalization fuels the growth of the logistics market. For instance, in December 2020, India and the UK announced a plan to finalize free trade agreement (FTA) in areas such as pharmaceuticals, fintech, chemicals, defense manufacturing, petroleum, and food products by 2021.
Poor infrastructure and higher logistics costs
Logistics demands good infrastructure, supply chain, and trade facilitation. Without these, firms have to build up more stock reserves and working capital, which can strongly affect national and regional competitiveness due to high financial costs. In addition, lack of infrastructure hinders the logistics market as it increases costs and reduces supply chain reliability.
These include significant inefficiencies in transport, poor condition of storage infrastructure, complex tax structure, low rate of technology adoption, and poor skills of logistics professionals. For instance, according to a report by the Economist, an international newspaper, Latin America lacks adequate infrastructure. More than 60% of the region’s roads are unpaved. Further, inconsistency in the address and postal system is the other challenge for parcel delivery in Latin American countries. As many countries lack postal codes and rely on local landmarks for addresses, shipping companies often have trouble delivering parcels successfully. Moreover, logistics costs are heavily determined by the availability and quality of infrastructure. Infrastructure directly influences transport costs and indirectly affects the level of inventories, and consequently financial costs. Thus, owing to poor transport infrastructure, firms need to have high levels of inventories to account for contingencies, which can result in higher overall logistics cost. Therefore, poor infrastructure along with high inventory prices and insufficient warehousing space are expected to hamper the logistics market growth.
Lack of control of manufacturers on logistics service
By using logistics service, a manufacturing or retailing company has to rely on the reliability, competency, and honesty of logistics service providers. In this scenario, manufacturers or retailers must rely on logistics service provider, which results in lack of direct control. In addition, the manufacturer is not able to monitor the operations at the warehouse, which is a serious threat to the quality of products. Moreover, outsourcing to a third-party logistics (3PL) may potentially lead to a breach of confidentiality, resulting in the exposure of customer’s personal data or sharing of commercially sensitive information. Thus, lack of control of manufacturers on logistics service is anticipated to hinder the growth of the logistics market.
Emergence of last mile deliveries coupled with logistics automation
Last mile logistics refers to the final step of the delivery process from a distribution center or facility to the end-user. With the continuously increasing proliferation of e-commerce companies, the provision of efficient last mile deliveries is witnessing a major upswing in the logistics industry. In addition, getting a package within the same day of delivery is almost common in the present day, resulting in the growth of the last mile delivery services. Moreover, rising pharmaceuticals and food & beverages e-commerce industries are also witnessing greater emphasis on last mile delivery options across logistics industries. Furthermore, the continuous effort of logistics companies to offer efficient last mile deliveries is another opportunity that is expected to fuel the digital logistics market growth in the near future. In addition, automation has also been gaining traction in the logistics industry. The inception of logistics 4.0 is one of the key logistics market trends offering lucrative opportunities in the logistics industry market size. For instance, in July 2020, Movile Group, a mobile commerce platform company, invested in a Colombia-based last-mile delivery startup Mensajeros Urbanos. It aims to expand its operations in 10 major cities in Colombia and Mexico. It is expected to open 50 urban warehouses within 10 cities that it serves to reduce delivery time windows further and provide certain items for same-day delivery.
Cost cutting and lead time reduction due to adoption of multi-modal system
Reduction in the cost of transportation and timely delivery of goods pose a challenge to logistics service providers to increase profitability. The number of orders to be delivered in a limited time has increased, as a result of which logistics companies have the opportunity to use multi-modal transportation system to increase efficiency of the supply chain. The advantage of multimodal transport is that it uses the most efficient combination of transport modes, keeping the freight costs down. For instance, APL Logistics provides ShipMax solution to its customers.
It includes pairing with compatible trucking partners as well as allows customers to take advantage of better load utilization and delivery optimization, thus enabling customers to maximize transportation budget. Therefore, cost cutting and lead time reduction by adopting multi-modal system pose exponential growth opportunities for the key players operating in the logistics market. For instance, in December 2020, the Union Cabinet of Indian Government launched Multi-Modal Logistics Hub & Multi-Modal Transport Hub (MMTH) at Greater Noida to focus on the MMT infrastructure in the country.
In June 2023, GEODIS announced that it has opened its new Mexico City multi-user warehousing and distribution centre has begun operations . For GEODIS customers, the 145,000 square foot logistics centre supports omnichannel operations like e-Commerce, retail, and wholesale.
In May 2023, FedEx Express introduced one-stop logistical solutions for dangerous commodities in Cebu. Hazardous Materials are chemicals or products that, if not handled carefully, could endanger human health, public safety, or the environment.
In May 2023, Austrian logistics company Cargo-Partner announced that it will be purchased by Nippon Express Co., Ltd. for up to $150 million. Nippon Express' capacity to provide a range of logistical services between Asia and Europe is strengthened by the acquisition of Cargo-Partner..
In March 2023, DSV signed a contract to buy the American-based shipping and logistics firms Global Diversity Logistics and Sand M Moving Systems West. The acquisitions enhance DSV's expanding cross-border services to Latin America, align with its new Phoenix-Mesa Gateway Airport operations, and strengthen its position within the semiconductor industry.
In June 2022,Nippon Express Co., Ltd. introduced a new logistics service specifically designed for the pharmaceutical industry. This service enables the safe and efficient storage and transportation of pharmaceutical products at extremely low temperatures, which is crucial during the research and development phase as well as the formulation process.
In Janurary 2021, Kuehne+Nagel signed an agreement with the biotechnology company Moderna, which develops messenger RNA (mRNA) therapeutics and vaccines, to ensure the distribution and stockpiling of Moderna's COVID-19 vaccine. Kuehne+Nagel will support the global distribution of vaccine doses from Moderna's international supply chain, which is based in Europe. This includes distribution in Europe, Asia, the Middle East, Africa, and some markets in the United States.
KEY BENEFITS FOR STAKHOLDERS
- This study presents analytical depiction of the global logistics market analysis along with current trends and future estimations to depict imminent investment pockets.
- The overall logistics market opportunity is determined by understanding profitable trends to gain a stronger foothold.
- The logistics market report presents information related to the key drivers, restraints, and opportunities of the global logistics market with a detailed impact analysis.
- The current logistics market is quantitatively analyzed from 2017 to 2027 to benchmark the financial competency.
- Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the industry.
Logistics Market Report Highlights
Market Size By 2032
USD 16.8 trillion
CAGR of 5.6%
2022 - 2032
By End Use
By Mode of Transport
Key Market Players
Kuehne+Nagel Inc., DSV, C.H. Robinson Worldwide Inc., GEODIS, United Parcel Service of America, Inc., Deutsche Post AG, A.P. Moller - Maersk, DB Schenker, Nippon Express Co., Ltd., FedEx Corporation
Currently, healthcare, manufacturing and trade & transportation segments have witnessed large-scale adoption of global logistics market. Increasing adoption of logistics in these end user industries are expected to rise with highest market share and are identified as one of the lucrative targets for investment. As compared to the other segments, these applications possess larger market size by value. The application of logistics has expanded its reach and it is more inclined towards the developing economies. The revenue generated is mostly coming out from the developing economies rather than the developed economies. The demand for various goods is expected to increase at an exponential rate which would further increase the demand for logistics firms in the years to come.
Asia-Pacific holds the largest market share in the global logistics market in 2015. The growth of global logistics market in Asia-Pacific region is driven by burgeoning demand in China, and India. The second highest share is LAMEA followed by North America and Europe. The global logistics market is highly fragmented with the presence of large number of local players that occupy around 50% market share in the overall global logistics market.