Logistics Market To Grow At 8.4% CAGR Till 2019

The global logistics market is anticipated to exhibit an 8.4% CAGR from 2015 to 2019 (forecast period). It is driven by changes in the worldwide economy and international trade flow between countries. North America and Asia Pacific (APAC) hold high growth potential in relation to third-party logistics (3PL). Usage of logistical services in various sectors, such as media and entertainment, manufacturing, healthcare, and others may spur market growth.

Logistics is an important element in supply chain management (SCM). It involves transportation, storage, and distribution of goods from point of origin to destination. Most companies outsource their logistics and transportation needs to specialized providers. Such needs are outsourced to logistics companies and to companies specializing in warehousing, transportation, and freight & forwarding. The global market is however hampered by high operating costs and competitive pricing.

The worldwide market is segmented according to types, logistical models, and regions. Road transport, waterways transport, rail transport, and airway transport are various types of logistical transport. Road freight transport led the global market in terms of revenue in 2015 because of reliability, easy accessibility, and flexibility of operations. Improvements in road infrastructure in Asia Pacific, North America, and Europe can ensure this segment’s dominance throughout the forecast period. 

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Waterway transport dominated the market in volume terms in 2015. Total freight transported by sea was over 9 billion tons in 2013. Air freight had exceeded USD 70 billion in 2015. This segment accounts for around 72% cargo transport between Europe & Asia, and 43% cargo transport between Europe & North America. 

Based on logistical models, the industry is divided into First-party (1PL), second-party (2PL), 3PL, and others. Others encompass fourth-party logistics (4PL). In the 3PL model, external companies execute logistics activities within the main organization. 4PL acts like a middleman that arranges resources and technology of its own volition to execute logistics solutions which may include 3PL. 2PL, 3PL, and 4PL are services collectively known as contract logistics. 2PL led the market in 2015 in terms of revenue, followed by 3PL.

Regions in the global logistic market comprise Latin America, North America, APAC, Europe, and Middle East & Africa (MEA). APAC led the global market in 2015. This can be attributed to economic development in countries, such as Japan, Malaysia, China, India, Indonesia, and Singapore. A number of industry players have begun investing robustly in India.

In recent years, North America has exhibited substantial growth due to trading activities between U.S., Europe and South America. Germany, the UK (United Kingdom), and France are prime regions which contribute to the Europe market. The booming e-commerce industry may play a pivotal role in generating revenues for this region in the forthcoming years. Economic development in countries, such as Argentina and Brazil makes Latin America a one of the lucrative regions of the global logistics industry. United Arab Emirates (UAE), a key region in MEA, may exhibit an 8.6% CAGR during the forecast period. 

Prominent companies are DB Schenker, Deutsche Post DHL Group, Rhenus Logistics, Amazon Logistics, and United Parcel Service, Inc. (UPS). Amazon Logistics aims at increasing its business by investing in China. This strategy is expected to bring down global shipping costs and provide access to major routes, like those from Shanghai to Hamburg. 

Source: Logistics Market Analysis & Segment Forecast Report, 2024

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