Logistics Market : Soaring Popularity of E-commerce to Help Market Display Exponential Growth

The global logistics market is characterized by a high degree of fragmentation due to the presence of a large number of players. The top four players, namely Deutsche Post DHL, UPS Inc., Ceva Logistics, and FedEx held a meagre 15% of the market in 2015. Transparency Market Research (TMR) notes that companies in the market have been entering into strategic alliances and making investments for product innovation and development of new facilities to stay competitive with local as well as global players and strengthen their position in the global logistics industry.

In terms of revenue, the global logistics market is set to increase from US$8.1 trillion in 2015 to US$15.5 trillion by 2024 at a CAGR of 7.5% between 2016 and 2024. The market is expected to develop at a CAGR of 6.0% from 2016 to 2024 by volume.

Manufacturing Predicted to Remain Dominant Application Segment in Future

On the basis of transport infrastructure, road transport infrastructure led the global logistics market with a share of 44.6% in terms of revenue. However, in terms of volume, waterways held the dominant share of 47.9% in the global market in the same year.

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In terms of logistics model, second-party logistics accounted for the leading share in terms of both volume and revenue in 2015. However, first-party logistics are expected to display the fastest growth rate than any other logistics model until the end of the forecast period in 2024. By application, manufacturing leads the logistic market presently and is expected to display robust growth in the coming years as manufacturing sector has the longest supply chain as compared to other application sectors. This is followed by retail in terms of revenue.

In 2015, Asia Pacific held the dominant share of 46.6% in the global logistics market in terms of revenue. China contributes considerably to the growth of this regional market as it is a large manufacturing hub. India is emerging as a significant market due to economic development complemented by huge investments by government as well as private parties. Intraregional trade in the emerging markets of Asia Pacific combined with high GDP is also bolstering the growth of the Asia Pacific logistics market.

North America is expected to be the second-largest market in the global market in terms of revenue for the 2016-2024 period. This is due to the multifold growth of the e-commerce industry and huge investments made by large players in countries such as U.S. Rest of the World logistics market is expected to display a significant growth at a CAGR of 7.4% between 2016 and 2024. The increasing trade activities with Asia Pacific and South American countries such as Argentina and Brazil are propelling the region’s growth.

Use of Technology Catapults Growth of Logistics Market

The speedy and enormous growth of the e-commerce industry has had a significant influence on the global logistics market. The growing trend of online shopping has contributed immensely to the growth of this market. Consumers are increasingly using mobile data on smartphones and tablets for easy access to the Internet for convenience shopping. Other advantages such as home delivery of objects and customization and refinement of results are leading to increased use of e-commerce. This in turn, is favoring the growth of the logistics market.

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The large-scale investments for technological advancements has been highly influential on the growth of the logistics market. The use of various technologies for operations such as warehouse control, automated material handling, warehouse management, biometrics, and RFID are assisting companies to carry out logistics services more efficiently. For example, in 2014, Deutsche Post DHL entered into an agreement with Escher Group, which enabled DHL to execute easy parcel delivery and collection in Germany.