Contract logistics expected to expand at a healthy rate
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CONTRACT logistics will boom in the years ahead, driven by Asia's fastest growing economies, according to Transport Intelligence.
The global contract logistics market expanded by 5.4 per cent last year to 177.6 billion euros (Bt6.5 trillion), according to TI’s new report, which incorporates market sizing data techniques,
A healthy compound annual growth rate (CAGR) of 6.8 per cent is forecast for the global market from 2014-18, which will see Asia’s importance to solutions providers loom large.
Over this period, the Asia-Pacific market could grow by a CAGR of 10.7 per cent to 85.5 billion euros and account for 37 per cent of the global market, up from 32 per cent last year.
Expansion of the Chinese market has become a key accelerator of the global market irrespective of the GDP slowdown of the world’s second largest economy.
The Chinese market expanded by 17.7 per cent to 18.9 billion euros last year, far outstripping the 7.4 per cent of real GDP growth estimated by the International Monetary Fund.
From 2014-18, Asia-Pacific’s market is expected to expand by 28.6 billion euros, of which 16.1 billion euros will be attributable to China.
“Concerns over China’s economic performance in the year were generally overblown,” David Buckby, the report’s lead author, said last week.
“Measures of capacity utilisation, inventory turnover, average inventory, new orders and logistics service charges were all higher on average in 2014 than a year earlier.”
Gulf States such as Saudi Arabia, the UAE and Qatar also have double-digit CAGR growth forecasts for 2014-18, although other countries in the Middle East bring that region’s overall expansion down to a CAGR of 8.6 per cent over the period.
The contract logistics market has benefited in recent years from stronger economic fundamentals in most key regions.
“We have also seen the positive influence of trends such as e-retail, which has increased the role and importance of logistics,” he said.
“We believe that global contract logistics growth will steadily accelerate in the coming years.
“The ‘Internet of Things’ will create vast amounts of data, but how logistics companies and their cus?tomers handle the data will be critical.
“We also think that drones, autonomous vehicles and warehouse robotics controlled by computers will lead to the automation of significant parts of the logistics industry.
“There is little doubt that the industry will look very different 10 years from now.”
The digital revolution and the Internet of Things will impact on how contract logistics providers source, analyse and act on data.
Transport Intelligence is a leading provider of research and analysis dedicated to the global logistics industry.
