Global Logistics Market Predicted to Top US$15 Trillion by 2023

New research report points to investments in technology, improved road infrastructures and global gains as significant logistics market drivers.

Technological innovation investment is fast-forwarding the logistics market. Automated material handling equipment, trailer seals, GPS, warehouse control software, warehouse management software, biometrics and RFID are different technologies that will help companies more proficiently run run their logistics services from now through 2024.

Those findings come from a new market report published by Transparency Market Research (TMR), a global market intelligence company. The report estimates the logistics market value at US$8183.46 billion in 2015, and forecasts it to reach US$15522.02 billion by 2023, with a healthy 7.5% Compound Annual Growth Rate. By volume, TMR says the market was valued at 54.69 billion ton in 2015, and predicts it will show a 6% CAGR and reach 92.10 billion ton by 2024.

The logistics market, TMR explains, includes supply chain activities such as transportation, customer service, inventory management, flow of information and order processing. Some other activities of the supply chain are warehousing, material handling, purchasing, packaging, information and maintenance.

TMR segments the logistics market into road, waterways, rail and air transport. It notes, “Road freight transport is the most widely used transport infrastructure globally and it is vital to the social integration and economic development of various counties. Flexibility of operations, easy accessibility, reliability and door-to-door service has gained road transport an increasingly higher share of both freight traffic and passenger transport modes. With improved road infrastructure in majority of the economies such as North America, Europe and Asia Pacific, road transport is the most favorable mode of logistic transport.”

Based on the various logistics model types, TMR segments the logistics market into first-party logistics, second-party logistics, third-party logistics and others. The report says, “Many multinational companies are operating on a large scale from manufacturing to distributing of goods. This makes it difficult for the manufacturers to manage the supply chain and thus organizations prefer to outsource their complete logistics activities or some activities to a third-party logistics service provider.

“At present, geographical expansion is a key strategy of many organizations. To achieve this, MNC's open new distribution centers across different countries in the world, which require efficient logistics services, thereby, fueling the demand for logistics. Any trader, manufacturer, importer/exporter, distributor, retailer or wholesaler having goods moved from their own place of origin to another place. In addition, first-party logistics are companies, which have their logistics chain. First-party logistics is an individual that needs to have freight, cargo, goods, merchandise or produce transported from a point one to a point two. A first-party logistics can be a trader, manufacturer, importer/exporter, distributor, retailer or wholesaler in the international commerce field.”

The report also identifies the logistics market by geography, classifying it into four regions: North America, Europe, Asia-Pacific, and Rest of the World (RoW). “Currently,” says the report, “Asia Pacific [holds] the major share of the market, followed by North America, Europe and Rest of the World (RoW). China is the largest logistics market in the Asia Pacific region. The primary factor driving the growth of the market in China is the huge population in the country. In addition, availability of logistics products in China is further driving the growth of the market in the country.”

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