-
This year’s global contract logistics market is expected to grow at a slower pace of 7.1% y-o-y after a rebound that drove growth by 8.7% in 2021, Transport Intelligence reports
-
The report says Asia Pacific remains the largest contract logistics market by region, with China overtaking the US’ market value by 2026
-
DHL and GXO maintain leading positions in North America and Europe
The global contract logistics market is seen slowing in 2022, growing at a milder pace of 7.1% year-on-year, according to transport research provider Transport Intelligence (Ti).
This is in contrast to the 8.7% y-o-y growth in 2021, expanding its value to more than €2 trillion (US$2.04 trillion), surpassing its pre-pandemic market value. In 2020, the market contracted by 3.3%.
The market expansion was driven largely by pent-up demand and savings growth in the face of restrictions on activity as well as global trade, and recovering manufacturing, Ti said in its “Global Contract Logistics Report 2022” released on July 20.
The e-commerce vertical was also a big growth driver during 2021, as the COVID-19 pandemic accelerated digital transformation and global internet penetration, the report said.
Analysts who wrote the report, however, said as the growth drivers gradually abate and the economy weakens, global trade growth is expected to moderate in 2022. As a result, they expect the global contract logistics market will grow at a slower pace of 7.1% y-o-y.
The industry’s growth last year exceeded its pre-pandemic levels with all regions surpassing their previous performance, a marked change from 2020.
Ti, a provider of market research to the global logistics industry, said that the global contract logistics market is expected to grow further in 2022, but at a slower pace of 7.1% y-o-y, logging a compound annual growth rate (CAGR) of 4.9% over the five years to 2026.
The report, written by industry researchers, analysts and associates, is one of several reports published each year by the Ti team, utilizing information from its GSCI knowledge portal, a data powerhouse with more than 1 million pieces of data and analysis.
The report takes an in-depth look at the implications of a transforming retail market for logistics providers, as well as the current warehousing landscape. It outlines the forces that are shaping the future of warehousing, and questions whether multi-storey warehousing could be the answer to historically low vacancy rates.
Among the report’s highlights are:
- Asia Pacific remains the largest contract logistics market by region, with China poised to overtake the US’ market value by 2026.
- The implications for the logistics sector supplying retailers with services will be transformative. The reality of retail logistics will no longer be that of “trucks & sheds”, but rather a very re-engineered environment that emphasizes speed, precision, and responsiveness.
- The report noted that e-retail and physical retail uncertainty poses difficult questions for logistics service providers. It said logistics companies need to be very sensitive to the risks that exposure to specific vertical sectors presents.
- Demand for warehousing is increasing, with low vacancy rates across the globe. The development of the global warehousing industry is also being influenced by three major categories of change drivers: supply chain trends, innovation, and customer needs.
- DHL and GXO have led the global contract logistics market. Both have managed to maintain leading positions in North America and Europe, which has helped both to top the list.
