Logistics Market

According to a research report "Logistics Market by Model (1PL, 2PL, 3PL, 4PL), Transportation (Road, Rail, Sea, Air), End-Use Industry (Healthcare, Automotive, FMCG, Energy & Utilities, Industrial Machinery & Equipment), End-use (B2B, B2C) and Region - Global Forecast to 2027" According to a research report, the global logistics market is estimated to grow from USD 258.7 billion in 2022 to reach USD 445.8 billion by 2027, at a CAGR of 11.5%. The growth of the logistics market is attributed to the fact that countries are trying to develop themselves as major economic and trade hub. As a result, there is a major focus on developing new supply chains and optimizing existing ones. This supports industries like manufacturing, power, and E-commerce, further boosting the global logistics industry. This allows them to take part and compete or collaborate with the global supply chains.

Healthcare would be the fastest-growing market

The healthcare sector has a tremendous potential due to rising global concerns for better health and timely availability of medical supplies across different regions of the world. Logistics, as has been seen in last few years, specially during pandemic, has been the most important aspects of healthcare sector, playing crucial role in efficient supply of drugs and supplies to every corner of the globe. In doing so, different stakeholders at various levels for instance, exporters, shipping companies, logistics & warehousing for safe storage, and final dispatch by third party are working in a synchronized way to leverage the true potential of global logistics market for the healthcare sector. Facilitative regulatory policies also supports growth of startups at aggregator level for last-mile delivery of healthcare needs. For intstance, Biddano, a B2B healthcare logistics platform founded in 2016, provides faster and more reliable delivery to pharmacies and hospitals within 45 minutes. This start-up employs a plug-and-expand model to assist stockists in managing demand and supply while expanding their geographical reach, thereby driving the global logistics market. Air Canada Cargo, DHL International GmbH, Barrett Distribution, CEVA Logistics AG, Cold Chain Technologies LLC, Deutsche Post DHL Group etc. are some of the key players in the global logistics market catering to the requirements of the healthcare sector. Asia Pacific region is estimated to hold the largest prospects for healthcare logistics due to rising geriatric care in countries like Japan and China along with maintaining supplies to the world. For example, India is the major exporter of generic drugs to many developing countries. Thus the increased focus of governments across the globe to improve health infrastructure after the COVID-19 pandemic and maintain seamless supplies, will play a key role in the global healthcare logistics market.

Roadways are expected to register the fastest growth in the global logistics market

Roadways are preferred because of the effective use of existing infrastructure and comparatively low-cost road transport machinery. Road freight is a cost-efficient way of transporting goods. The price advantage is most noticeable for small amounts of freight, so road freight is often the best choice, especially for companies with low transport volumes. Also, the well-developed road system enables flexible routes or intermediate stop planning. Road freight can modify and expand a route at short notice. Even spontaneously requested transports can often be carried out because the use of the road infrastructure is possible without prior registration or booking. Door-to-door delivery is, in most cases, only possible with road freight. Cargo is picked up directly from the production site or loading point and carried immediately to its destination without needing any other mode of transport or reloading. For instance, India launched the Bharatmala Pariyojana for the development of approximately 26,000 km of Economic Corridors, which, along with the Golden Quadrilateral (GQ) and North-South and East-West (NS-EW) Corridors, are expected to carry the majority of freight traffic on roads. According to WHO, in the Russian Federation, the Saint Lukas medical train has delivered health care directly to people in Siberia for many years – providing a health lifeline to communities. Given the massive economic opportunity here, a slew of startups is disrupting this sector with innovative business models that solve most of the industry pain points from the supply side. According to recent reports, over 2000 logistics tech startups in India have come into the market in less than a decade. Startups like Ecom Xpress, Blackbuck, and Delhivery are major logistics startups that have become significant players in the Indian logistics market. This growth will be fueled by factors such as the rapidly growing e-commerce sector and retail sales market, among others.

Asia Pacific is expected to witness the fastest growth in the logistics market during the forecast period

Asia-Pacific is anticipated to witness the highest CAGR over the forecast period, followed by Europe and North America. China holds the largest market share in the Asia-Pacific region with USD 3.3 billion exports in 2021, constituting around 20% of its GDP. Whereas, for India, the exports of goods and services in 2021 is near 21.4% of the country’s GDP. A growing economy, population, and related needs for food, fuel, and goods, especially in manufacturing and e-commerce, are driving the market. Rising per capita income, especially in China and India, drives the need for improved logistics infrastructure. Various local governments have also started incorporating the need for improved infrastructure for logistics in their local-level policies and development programs with the development of multi-terminal major ports across sea-lines of communication to leverage the global logistics market. The rapid expansion of the e-commerce and manufacturing sector has dramatically increased the need for logistics in the Asia Pacific. In September 2022, GLP Japan announced the development of GLP SJL Sakai, an advanced logistics facility with a total floor area of approximately 93,000 sqm in Osaka. The facility features vertical conveyors, increased floor loading, and LED lighting with motion sensors, the facility offers value-added services that maximise its operational efficiency. In 2022, India launched the National Logistics Policy (NLP). The aim is to ensure quick last-mile delivery, end transport-related challenges, save time and money for the manufacturers, and prevent wastage of the agro-product. China aims to reduce its total logistics costs as a proportion of GDP from 15% in 2019 to 12% by 2025. To meet this target, the central government is repositioning key logistics hubs and extending investment and financial support to these locations. In 2020, China added 22 new cities to the list of 23 logistics hubs announced in 2019. The National Development and Reform Commission (NDRC) reportedly plans to identify 150 logistics hubs in the next five years. With the factors mentioned before, it is quite certain that the Asia Pacific market will register the fastest growth during the forecast period.

Key Market Players

The global logistics market is dominated by major players such C.H. Robinson Worldwide Inc. (US), IJ.B. Hunt Transport Services (US), Ceva Holdings LLC (France), FedEx Corp (US), Expeditors International of Washington Inc. (US), XPO Logistics Inc. (US), United Parcel Service, Inc. (US), Deutsche Post (Germany), DHL Group (Germany), Americold Logistics (US), Kenco Group, LLC (US), and DSV Air & Sea Inc (UAE).

These companies have strong distribution networks at a global level and offer an extensive product range. These companies adopt strategies such as new product developments, collaborations, and contracts & agreements to sustain their market position.

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