Chemical Logistics Market Size, Share & Trends Analysis Report By Mode of Transportation (Roadways, Railways, Airways, Waterways, Pipelines), By Service (Transportation and Distribution, Storage & warehousing, Customs & security, Green Logistics, Consulting & management services, Others), By End-Use Industry (Chemical industry, Pharmaceutical Industry, Cosmetic Industry, Oil & gas industry, Specialty Chemicals Industry, Food, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global chemical logistics market size was valued at USD 275.23 billion in 2023. It is expected to reach USD 398.57 billion in 2032, growing at a CAGR of 4.2% over the forecast period (2024-32). As industries such as pharmaceuticals, agriculture, and manufacturing expand globally, the demand for chemicals used in these sectors also rises. This necessitates efficient logistics solutions to ensure timely delivery and availability of chemical products.

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 Dynamics

Market Drivers

Increased Chemical Production and Requirement for Handling & Distribution of Dangerous Chemicals

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.

Market Restraints

Complexities Related to Chemical Logistics

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.

Market Opportunities

The Increased Tech-Driven Logistics Services and Adoption of IoT Enabled Devices

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.

Regional Analysis

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.

Segmental Analysis

The global chemical logistics market is classified based on the mode of transportation, service and end-use industry.

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.

Impact of covid-19

COVID-19 has positive and negative market consequences, as carbon emissions have decreased globally due to the lockout. COVID-19's reduction in emissions is a short-term benefit. Still, when industries and enterprises attempt to recoup some of their financial losses in the first quarter of the year, carbon emissions will rise dramatically. COVID-19 had a negative impact on global recycling efforts. Countries, notably the United States, have halted or decreased recycling programs to focus on collecting additional domestic waste or because services have been disrupted by the virus.

Also, with industries slowly returning to normalcy following the COVID-19 outbreak, this shift in workplace health and safety is expected to increase due to mandatory social distancing and continuous personal care through sanitization to eliminate even the tiniest possibility of COVID-19 spread. COVID-19 has impacted various companies' revenues, and if the lockdown is lifted, companies will turn their attention to operations to make up for their losses.

Recent Developments

• March 2024 - In the Netherlands, Leschaco opened a chemical logistics center. The facility is well-connected to major seaports and vital waterways like the Rhine and Meuse, making it an ideal location for multimodal transportation.
• April 2024 - The top supply chain services provider in North America for the chemical industry, Quantix SCS ("Quantix"), is a portfolio business of Wind Point Partners ("Wind Point") and announced that it acquired CLX Logistics ("CLX" or the "Company").