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The Global Logistics Market, by Transport Infrastructure (Road, Sea, Rail, Air), by End-use Industry (Manufacturing, Retail, Trade & Transportation, Government & Utilities, Healthcare, Media & Entertainment, Banking & Financial Services, Telecommunication, Others), and by Region (North America, Europe, Asia Pacific, Latin America, Middle East and Africa) - Global Forecast to 2027, is expected to be valued at US$ 8627.4 million by 2027, exhibiting a CAGR of 5.3% during the forecast period (2020-2027), as highlighted in a report published by Coherent Market Insights.

Overview

Logistics is a business-planning framework to manage material, information, service, and capital flows. Some of the foremost logistics operations include procurement, production, disposal, distribution and after-sales logistics. Logistics activities can be classified into two types i.e. core and supporting. Core activities include all the activities of the supply chain such as transportation, inventory management, customer service, information flows, and order processing. Support activities may include warehousing, material handling, purchasing, packaging, information, and maintenance among others.

The global logistics market is estimated to account for US$ 8627.4 Mn in terms of value by the end of 2027, exhibiting a CAGR of 5.3% during the forecast period (2020-2027).

Market Driver

Rising technological developments and digital revolution in communication is expected to propel the global logistics market growth over the forecast period

Digital revolution has led to numerous technological advancements with the advent of novel products in the recent past. The dependency of customers on logistics services has increased as a result of improvement in the communication process. Furthermore, the transaction process has become more secure wherein a customer can rely on online transactions with security assurance from the banks. Players such as VeriSign and PayPal among others provide online transaction security assurance Technological advancements have made it possible to track the object throughout the delivery process. This is due to the advent of tracking systems such as bar code systems, GPS (Global Positioning System), and RFID (Radio Frequency Identification) tags among others. Hence, these factors are expected to drive growth of the global logistics market growth over the forecast period.

Market Opportunity

Rising adoption of green logistics solutions can provide major business opportunities

Green logistics refers to an attempt to measure and minimize the ecological impact of logistics activities. The primary objective is to create a sustainable company value by maintaining a balance between economic and environmental efficiency. Many logistics companies adopting green logistic solutions, in order to reduce the adverse effects on environment and enhance the efficiency of the company.

Market Restraint

Rise in inventory cost and air pollution is expected to hamper the global logistics market growth over the forecast period

Major threat for market growth is low warehousing space and a rise in inventory cost. Inventory cost includes the price paid to purchase the item as well as the cost of storing and maintaining the item for however long it takes. Since the warehousing space is inadequate, it incurs into additional inventory cost, making the entire logistics operation significantly expensive. Therefore, these factors are expected to hamper the global logistics market growth over the forecast period.

Key Takeaways

  1. Retail:

On the basis of end user, Retail segment is expected to witness significant growth in the global logistics market. This is owing to surge in online shopping. Furthermore, the most significant change in retail industry is robots in warehouses and distribution centers. This will completely change the customer experience and reduced delivery times.

Market Trends

  1. North America Trends

The North American region includes countries such as Canada, Mexico, and the U.S. The growth in the region is attributed to well-developed transport infrastructure and sound transport policies. Another important trend that has supported growth is the rapid industrialization in Asia Pacific particularly China and increase in consumption of foreign goods in North America. There is also an increase in trade activities between the U.S. and South America. At present, Brazil is one of the largest trade partners of the U.S. Furthermore, rise in e-commerce has prompted the growth of retail markets. For example, online retailers such as Adidas is utilizing large distribution facilities to support both in-store and online sales whereas other retailers build separate facilities to support their e-commerce business. In the coming years, the impact of all these developments is expected to support the growth of the logistics market in this region.

  1. China Trends

Companies are shifting their manufacturing facilities to the interior parts of the country, owing to increasing prices and rising wages in the coastal regions. With the expansion of industries, logistics service providers are following their customers into China and are continuously expanding their contract logistics. Hong Kong and Shanghai are the most important logistics hubs in China. Hong Kong has the second largest seaport in the world and the second-largest freight airport in the world. Further development of these logistics hub will support the growth of logistics services in China. Rail lines in China are not properly built due to which it is used in the shipment of only bulk cargo such as iron ore or coal. This mode of transport is less popular among international companies.

Global Logistics Market - Impact of Coronavirus (Covid-19) Pandemic

Logistics companies that are involved in the storage, movement and flow of goods have been directly affected by the coronavirus (COVID:19) pandemic. In South Africa, the covid impact has impacted several companies such as Transnet and others. With only 50% of staff operational, the company has made barely 60% of its forecast revenue.

Competitive Section

Key companies operating in the global logistics market are Changan Minsheng APLL Logistics Co., Ltd., China Ocean Shipping Company (COSCO), Deutsche Post DHL, FedEx Corporation, Jiangsu Aucksun Co. Ltd., Kuehne-Nagel, Inc., Orient Overseas (International) Ltd., Shenzhen Feima International Supply Chain Co., Ltd., Sinotrans Limited, United Parcel Service, Inc.

Key Developments

  1. Major companies in the market are focused on business and capacity expansion in order to gain a competitive edge in the market. For instance, in March 2020, Deutsche Post DHL, a German logistics company, announced to expand its live tracking of parcel and letters, in order to make it easier to pay for postage without having to stand in line at a post office.
  2. Key players in the market are focused on mergers and acquisitions, in order to enhance the market presence. For instance, in November 2019, Kuehne-Nagel, a Swiss logistics company, acquired Rotra, a Dutch company.

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