Global Logistics Market Fueled by Thriving E-Commerce Industry

The term ‘logistics’ was initially utilized by military personnel for referring to the movement of equipment and supply of troops. Nowadays, it is widely used in business language for indicating the process of planning, coordinating, implementing, and managing the flow of resources from origin to the point of consumption. Its main objective is to meet customers’ needs in a timely as well as cost-effective manner. Logistics management includes production, packaging, inventory, warehousing, security, material handling, integration of information, inbound and outbound transportation, and supply/demand planning of the third-party providers. Some of the resources managed in logistics include tangible items such as raw materials, equipment, and food products, and abstract goods or services like information. The global logistics market reached a value of US$ 4.92 Trillion in 2021.

Web-based shopping has gained immense traction and become a go-to option for the majority of shoppers in recent years. This has provided purchasers with the convenience of shopping online from their homes and returning unwanted products without physically going to the retailer. As logistics play a significant role in storing, transporting and delivering goods purchased online, the thriving e-commerce sector is impelling the growth of the market. Apart from this, logistics infrastructure is currently being upgraded in numerous countries with the help of IT for smooth flow of information from one source to another. For instance, the increasing use of RFID (Radio Frequency Identification), Bluetooth and other newly introduced technologies, such as drone delivery and driverless vehicle, is enhancing the efficiency of logistics services. Further, emerging free-trade zones and reverse logistics services, rising trade-related agreements, and increasing adoption of green logistics solutions are also contributing to the market growth. Looking forward the market to reach US$ 6.55 Trillion by 2027, exhibiting at a CAGR of 4.7% during 2022-2027.

Market Segmentation: Based on Model Type, Transportation Mode, End-Use & Region

• On the basis of model types, the market has been segregated into 2 PL, 3 PL and 4 PL. Currently, 3 PL is one of the most popular segments in the market, followed by 2 PL and 4 PL. In 3 PL, manufacturers outsource transportation as well as logistics activities to third-party companies that may have their own workforce or hire human resource from outside to manage the outsourced logistics and distribution activities. Generally, these companies are also responsible for freight forwarding, integrated operations, transportation services, inventory management, cross-docking, packaging and warehousing, till goods reach their end-users.
• Based on transportation modes, the market has been classified into roadways, seaways, railways and airways. Amongst these, roadways represent the leading mode of transportation, holding around two-thirds of the total market share. Roadways have gained popularity in the logistics market on account of their easy accessibility, flexibility of operations and availability of door-to-door services.
• On the basis of end-uses, the market has been segmented into manufacturing, consumer goods, retail, food and beverage, IT hardware, healthcare, chemicals, constructions, automotive, telecom, oil and gas, and others. At present, manufacturing accounts for the majority of the global market share.
• On the geographical front, Asia Pacific enjoys the leading position in the market, holding one-third of the total share. This can be accredited to the strong economic growth, rapid urbanization, and advancements in information technology and transportation industry in the region. Other regions include Europe, Latin America, North America, and Middle East and Africa.

Competitive Scenario

The market is fragmented in nature due to the presence of a number of regional as well as global players. Some of these key players are FedEx Corp., Kenco Group, XPO Logistics Inc., Ceva Holdings LLC, Americold Logistics, LLC, C.H. Robinson Worldwide, Inc., United Parcel Service, Inc., Expeditors International of Washington Inc., Deutsche Post DHL Group, and DSV Air & Sea Inc. In order to retain their position in the market and expand their consumer base, these players are adopting a number of strategies such as entering into partnerships with established players.

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