The global chemical logistics market size was valued at USD 251.8 billion in 2022, presumed to reach USD 387.69 billion in 2031, expanding at a CAGR of 4.2% during the forecast period ( 2023-2031). The expansion of the chemical logistics market is driven by factors such as the increased need for chemical logistics due to elevated chemical production and safety issues regarding the transport, storage, and distribution of hazardous chemicals. However, chemical logistical complexities, safety concerns, and a lack of infrastructure impede the chemical logistics market's expansion. Moreover, the emphasis on local production of chemicals, the rise of tech-driven logistics services, and the increasing acceptance of IoT-enabled linked devices offer extraordinary potential opportunities for market participants.
Chemical logistics is the transfer of chemicals along the supply chain with the assistance of transportation, warehousing, and other services offered by chemical logistics firms. The chemical industry is a vital component of nearly all other sectors, including plastics processing, pharmaceuticals, food production, and vehicle manufacturing. The majority of industries rely on items manufactured by the chemical sector. Whether the compounds are liquid or solid, they are the essential basis for pharmaceuticals, food, and other everyday items. Transportation, handling, and storage of these chemicals, which are employed in the production of standard products, require specific attention to prevent safety dangers such as contamination, spoiling, and contamination. In addition, chemical logistics service providers must comply with ever-changing federal and state standards to reduce the risks to workers and the general public.
|Market Size||USD 387.69 billion in 2031|
|Fastest Growing Market||Europe|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
Over the past years, numerous chemicals have increased in the manufacture of numerous chemicals. Shale gas has grown in importance as a feedstock in the energy industry, which has increased the demand for its conveyance to energy companies. According to the American Chemistry Council (ACC), the US chemical sector has increased its production of chemicals by 0.8% compared to 2016, with a 3.2% increase expected for 2022. Thus, manufactured chemicals must be appropriately delivered, which is expected to increase demand for the global chemical logistics industry in the foreseeable future. Consequently, a rise in chemical production is predicted to fuel the expansion of the chemical logistics market.
Several chemical logistics firms facilitate the movement of raw materials and finished chemical products used in various industries, including oil & gas, pharmaceuticals, and process industries. Manufacturers and third-party logistics (3PL) providers are embracing federal and state safety requirements for transporting dangerous goods to reduce the associated risk. For instance, third-party logistics (3PL) companies offer chemical shipment services like non-asset logistics management, which allows shippers to select carriers and manage their commodities more efficiently. Consequently, the increase in demand for the processing and distribution of hazardous chemical goods promotes the expansion of the chemical logistics market.
Chemical logistics firms offer services such as transporting commodities via rail, road, air, and sea. Thus, the transportation of products involves several complications. These include an oversaturated rail network, unclear transit times, and insufficient flexibility in transporting chemicals, such as varying requirements, road quality, and theft. These reasons are anticipated to impede chemical logistics market expansion. For example, freight shipment by rail can take up to 8 days for a distance of approximately 2,000 kilometers. To prevent losing sales due to insufficient stock availability during production, many logistics organizations wind up keeping excess inventory with inadequate safety due to the uncertainty of transportation times. Thus, such difficulties hamper the chemical logistics market's expansion.
Demand for automated and updated green warehouses in the chemical sector for environmentally responsible corporate operations drives the chemical logistics market expansion. Due to rising concern for energy conservation and environmental preservation, chemical producers rapidly engage in cost-effective warehousing solutions that integrate green practices and smart technology, like the Internet of Things (IoT), smart sensors, and robotics. In logistics services, there is also a surge in the use of artificial intelligence (AI), machine learning, radio-frequency identification (RFID), and Bluetooth, as well as other recently introduced technologies such as drone deliveries and driverless cars. Consequently, expanding technology improvements in the logistics sector offers lucrative potential opportunities for the chemical logistics market.
The region-wise segmentation of the global chemical logistics market includes North America, Europe, Asia-Pacific, and LAMEA.
The Asia Pacific will command the market with the largest share while growing at a CAGR of 3.2%. The expansion of the chemical market and the movement of chemical manufacturing operations away from their traditional locations and into the developing nations of the Asia-Pacific region are the factors that contribute to the expansion of the chemical logistics market in the region. Demand for an organized upstream and downstream chemical logistics supply chain has developed in Asia-Pacific's developing nations due to a rise in infrastructure and the establishment of new industrial locations, and a spike in urbanization. In addition, the increase in chemical industry clustering in the Asia-Pacific region alters the global trade pattern. It creates opportunities for supply chain management from suppliers to manufacturers to consumers. In addition, progress in cross-functional supply chain management systems presents new opportunities for the chemical logistics industry.
Europe will expand at a CAGR of 4.9% and hold USD 86 billion. It is anticipated that the increase in ethylene output in significant nations like Germany, France, and the United Kingdom will contribute to expanding the petrochemical industry. This is likely to stimulate the expansion of the European chemical logistics market. In the future, Europe's petrochemical industry is anticipated to experience increased cracker and polymer plant outages due to demand changes. In addition, the European petrochemical market is characterized by industry leaders like INEOS, Shell Chemicals, and BASF. This is likely to promote the expansion of the European chemical logistics industry.
Also, the United Kingdom is a global leader in the research and production of ultra-low and zero-carbon cars. In turn, this generates supply chain prospects for the chemicals industry in developing low-carbon automobiles for the future generation. In addition, the UK government has funded USD 288 million through the Faraday Battery Challenge in 2018, creating a profitable opportunity for chemical businesses to collaborate with the automotive sector and other supply chain participants to develop novel chemicals, materials, and processes. This further propels the chemical logistics market in Europe.
The global chemical logistics market is classified based on the mode of transportation, service, end-use industry, and region.
Based on the mode of transportation, the categories include roadways, railways, airways, waterways, and pipelines.
The roadways section is envisioned to expand at a CAGR of 2.8% and hold the largest market share. This segment addresses the transportation of chemicals via road. In addition, chemical transportation businesses are investing in fleet quality improvements for chemical logistics. The leading firms in the logistics market are forming a joint venture to boost their capacity to supply chemical logistics services in China, which is expected to stimulate the market for highways. In 2020, Den Hartogh Logistics, a chemical logistics company, announced the acquisition of a majority stake in logistics company XT Logistics. In addition, it is envisaged that this joint venture would assist Den Hartogh Logistics in expanding its chemical logistics services in China with an introductory fleet of 13 trucks and 20 chassis.
The waterways section is envisioned to hold the second-largest share. The waterways are one of the least expensive ways to transfer enormous quantities of commodities from one region to another. For the delivery of various chemical products, cargo ships, tankers, vessels, and reefers ships are the numerous ship types employed. Chemical businesses and logistics organizations are developing collaborative ventures to ship diverse chemical goods. In 2020, for instance, ADNOC L&S, the maritime and logistics unit of Abu Dhabi National Oil Company, and Wanhua Chemical Group created a strategic joint venture called AW shipping.
Based on service, the categories are transportation & distribution, storage & warehousing, customs & security, green logistics, consulting & management services, and others.
The transportation & distribution section is envisioned to expand at a CAGR of 2.7% and hold the largest market share. Transportation & distribution service refers to moving chemical products across national borders or worldwide by various modes of transportation, including rail, highways, and others. Logistics businesses participating in the market are partnering to optimize and improve transportation facilities for the chemical industry, which is driving the transportation & distribution section of the chemical logistics market. CLX Logistics, LLC (CLX), a global logistics service provider, announced in 2020 a long-term extension and expansion of its cooperation with BluJay Solutions, a provider of supply chain execution solutions.
The storage & warehousing section will hold the second-largest share. Storage & warehousing describes the process of storing a collection of goods in a warehouse or specialized structure, typically with a controlled environment. Products destined for redistribution to retailers, wholesalers, or consumers are stacked in the storage area. This division consists of the companies' storage and warehousing services-related revenue. The incorporation of new warehousing services fuels the market expansion of the storage & warehousing segment in various countries by market-area transport businesses.
Based on the end-use industry, the categories include chemical, pharmaceutical, cosmetic, oil & gas, specialty chemicals, food, and others.
The chemical industry sector will expand at a CAGR of 2.7% and hold the largest market share. Most of the chemical industry comprises commodity or bulk chemicals used as raw materials to produce specialized and intermediate chemicals. Additionally, these bulk chemicals have the most significant market shares in sales and manufacturing of chemicals and high capital costs. The need for logistics services in the chemical sector is predicted to be driven by increased demand for raw chemicals and enterprises' emphasis on domestic manufacturing of chemicals.
The pharmaceutical industry sector will hold the second-largest share. This section includes logistics activities such as the creation and integration of supply chain management of chemical goods required by the pharmaceutical industry and the service of transportation & warehousing, freight forwarding, and product distribution. Special precautions must be taken to assure the quality and safety of pharmaceutical products, as most chemical substances are sensitive to temperature fluctuations. This presents a wonderful opportunity for market participants to expand their businesses.