Contract Logistics Market exceeds pre-pandemic value but growth is set to slow, warn analysts from transport consultancy Ti, in latest research report ̶ Global Contract Logistics 2022.
• Global contract logistics market is expected to grow at a slower pace of 7.1% y-o-y
• China poised to overtake the US’ market value by 2026.
In 2021 the global contract logistics market rebounded and exceeded its pre-pandemic levels. The latest report from Ti – the leading provider of market research to the global logistics industry – shows that all regions have witnessed contract logistics market growth in 2021, a marked change from 2020. All regions have seen contract logistics markets surpass pre-pandemic levels.
The Global Contract Logistics Report ̶ written by industry researchers, analysts and associates ̶ is one of several reports published each year by the Ti team, utilising data from its GSCI knowledge portal, a data powerhouse with over 1m 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 which are shaping the future of warehousing, and questions whether multi-storey warehousing could be the answer to historically low vacancy rates.
Report Highlights
• The global contract logistics market grew by 8.7% year-on-year in 2021. The global market is expected to grow by a further 7.1% y-o-y in 2022 and at a Compound Annual Growth Rate (CAGR) of 4.9% over the five years to 2026.
• 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 logistics services will be transformative. The reality of retail logistics will no longer be that of ‘trucks & sheds’, but rather a very reengineered environment that empathises speed, precision, and responsiveness.
• 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.
• 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.
The full report – available here – also provides a snapshot of the contract logistics providers which are leading the market on both a global and regional level. The report analyses the performance of providers against one another based on geographical revenues, profit margins, vertical sectors, and technology.
E-commerce a Major Growth Driver
After contracting by 3.3% in 2020, the global contract logistics market grew by 8.7% year-on-year in 2021, surpassing its pre-pandemic market value. 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.
The e-commerce vertical was also a big growth driver during 2021, as the COVID-19 pandemic accelerated digital transformation and global internet penetration.
As the growth drivers gradually abate and the economy weakens, global trade growth is expected to moderate in 2022. As a result, the global contract logistics market is expected to grow at a slower pace of 7.1% y-o-y.