According to data published by the United Nations in 2022, global trade in goods and services reached USD 32 trillion. Well, that is a humongous number! However, have you ever wondered who is behind transferring these valuable, sometimes perishable, goods safely across the world? These are the people working behind freight transportation units. Some examples of freight transportation include trucks carrying goods on highways, ships moving containers across oceans, and planes transporting packages through the air. On the back of the rising requirement to shift goods from one place to another, the global freight transport market is expected to witness significant growth. In this blog, we will understand the various factors associated with the freight transportation market.
What is freight transport?
Road transportation
A report published by the World Economic Forum states that the demand for road freight is projected to increase 3 times by the year 2050. People are relying more on road freights because road transport is best suited for transporting delicate goods. Also, some of the primary benefits of road freight transportation are written as follows:
- Ease for door-to-door services
- Service to remote areas
- Simplified logistics and packaging costs
- Reduced risk of damage
Additionally, the road freight transportation market size was valued to be USD 45,900 million in the year 2022 and is anticipated to flourish at a CAGR of 11% in the coming decade. On the back of the numerous benefits of road transport, many businesses are opting for it. For instance, Research Nester found that there are almost 59,510 freight road transport businesses in the United Kingdom in 2023. Other than this, data published by the World Bank in the year 2023, states that in India, roads contribute to taking almost 60.1% of its freight.
Railway freight transport
The rail freight transport market size is projected to thrive from USD 398 billion in the year 2024 to USD 510 billion by the year 2030. Some of the most prominent advantages of railway freight transport are mentioned below:
- Fewer greenhouse gas emission
- Higher efficiency
- Increased safety
- Intermodality
Some of the other statistics written below are also testimony that railway freight transport has become a favorite amongst the population.
- The data published by The European Rail Industry in 2021 stated that almost 80.1% of all freight train kilometers are electrically covered.
- Rail transport releases less than 1/5th of GHGs caused by road transport
- The threat of rail accidents is almost 40 times lesser than that of road transport.
- In 2022, the freight volume carried by Indian Railways reached over 1.4 billion metric tons.
- A data stated by European Commission in 2022, stated that rail freight transport in Europe reached 200 million tons-kilometers.
Some of the prominent companies in the rail freight transportation market are Union Pacific Railroads, Canadian National Railway, DHL, DB Cargo, and Russian Railways, etc.
Air Freight Transport
The air freight market size is projected at USD 151 billion by the end of year 2024. Moreover, the air freight market is expanding because the air cargo industry has become back bone of worldwide trade. Some of the prominent benefits of the air freight are written as follows:
- The fastest shipping method
- Highly reliable arrival and departure time
- Low insurance premium
- Ultra advance level of security and eliminating risk of theft
- Less requirement of warehousing
Some of the below-written data shows how air freight transportation is becoming extremely popular. According to data published by the International Air Transport Association in 2022,
- USD 5 trillion of goods are transported by air globally
- Approximately, 131.1 billion parcels delivered in 2023 and anticipated to get double by 2026
- 80.1% of all cross-border e-commerce is transported through air freight
On the back of this, the future of air freight transport is bright. Let us switch on to understanding the next type of freight transport.
Water freight transport
According to data found by Research Nester found that almost 80.1% of all goods are transported by sea. One of the most prominent advantage of water freight transportation is its cost efficacy. Some of the other advantages of water freight are:
- Important for foreign trade
- Suitable for bulky goods
- Require less maintenance
- More economical
- Increased product diversity
Some of the consumers prefer using multimodal freight transport where mixed models are used. However, the best way to transport goods hugely depends upon factors such as:
- Type of goods being transported
- Distance of the transit
- Budget availability
Freight Transport Market Analysis:
The freight transport market size was over USD 35 billion in the year 2023. Also, the market is poised to cross USD 98 billion by the end of year 2036. The growth of the market can be attributed to the following factors:
- Rising adoption of artificial intelligence
- Increasing spending on efficient logistics solutions
- Surge in shipment of goods via air
However, factors such as varying regulations across different regions and environmental concerns are some of the growth-restricting factors. Furthermore, the North American region in the freight transport market is set to account for almost 60% of revenue share by the year 2036.
Some of the companies in the domain are CEVA Logistics, CJ Logistics Corporation, United Parcel Service of America Inc., Kuehne + Nagel International AG, Schneider National Inc., Oracle Inc., SAP SE, C.H Robinson Worldwide Inc., and Kerry Logistics Network Limited.
Wrapping up,
The above discussion illustrates that the market is offering numerous lucrative opportunities for growth. However, to reach the pinnacle to the game, market players are required to understand the intricacies of the market. An exhaustive market research report carries details such as regional analysis, growth-propelling factors, etc. These factors help businesses to grow in the market and carve a niche for themselves.
