The global logistics services market was valued at USD 8.88 billion in 2018 and is expected to reach a value of USD 15.61 billion by 2026 end, with a CAGR of 7.3% during the forecast period, 2019–2026.
Logistics services are an integral part of any supply chain management in almost all kinds of business activities. The fundamentals of logistics services involve designing, implementation, and regulation of forward, and backward flow effectively and efficiently as well as storage of goods, services, and related information. Principal activities of logistics services include shipping of raw materials, distribution, warehousing, and quick deliveries of end-products to consumers. Inbound and outbound logistics are the two-process involved in logistics services. In the near future, logistics will play a vital role in transporting goods due to increasing trading activities.
Major factors driving the growth of the logistics services market include rise trade-related agreements between two countries, developing worldwide logistics infrastructure, advanced information technology and prospering transportation sector. There is a significant reduction in duties and taxes owing to the free trade agreement. Additionally, there has been increased in trade activities as importer and exporter which need not pay taxes to the government. These factors together create a favourable environment for the logistics services market to grow. Moreover, increased focus strengthening core business activities, the swift growth of e-commerce industry & related services, and desired cost reduction achieved by implementing third-party are other aspects projected to boost the growth of the market during the forecast period 2019-2026. Furthermore, foreign direct investment (FDI) and rapid economic growth particularly in developing economies, growth in the retail sector, is likely to have a positive impact on the global logistics services market.
The global logistics services market has been segmented into logistics model, deployment model, end-use industries and region.
The logistics services market is segmented into 1st party logistics (1 PL), 2nd party logistics (2 PL), 3rd party logistics (3 PL), and 4th party logistics (4 PL). 4th party logistics (4 PL) is gaining major popularity in the global logistics services market during the forecast period 2016 - 2026. 4 PL providers are responsible to manage entire activities involved in the supply chains such as storage, processes, procurement, distribution and others. This logistics service is usually chosen by the companies owing to benefits provided such as central asses or single point contact for logistics network, lower time and money required for logistics, uniformity and consistency which probably lack in other logistics model. Most of the firms are facing challenges on an individual basis such as limited sources, globalization, transparency and others which are overcome through the 4 PL services by using collaborative operational capabilities.
The logistics services market is categorized into roadway, airway, waterway, and railway. Airways are expected to contribute the largest share in global logistics services market and this majorly attributed to advantages associated with airway transport which includes high speed, useful for expensive and light goods, less damage as compared to others ways, and no extra infrastructure investment required. For instance according to Ministry of Civil Aviation, in 2019, international cargo encompasses 60 % of the total air cargo tonnes handled in India by exhibiting 15.6 % growth rate as compared to growth in 2016 and domestic air cargo grew by 8 %.
The logistics services market is segmented into industrial & manufacturing, retail, healthcare, oil and gas, and others. The health care sector is expected to be a major user of the logistics service incoming users. Growing global healthcare sector and export & import of the medical devices and others are fuelling the growth of the global logistics market during the assessment period 2016 - 2026. For instance, according to the International Trade Administration (ITA), the Indian healthcare industry was valued at USD 160 billion in 2017 and is projected to reach USD 370 billion by 2020. The scenario of growing healthcare industry highlights the growing demand for healthcare products, medical equipment and others which fuels the growth of logistics services market.
Geographically, the global logistics services market has been segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
Over the last few years, the logistics services market in North America has flourished successfully. The factors driving the growth of the logistics services market in the region include increasing trade activities among the U.S., Europe and South America. The Asia Pacific and U.S trade relation has grown deeper and consolidated from the decade due to rising demand for foreign goods from these countries. According to United States Department of Transportation, in 2017, the U.S. North American Free Trade Agreement (NAFTA) partners with Canada and Mexico showed growth of 7.9%, in all freight activities as compared to 2016.
Emerging countries such as China, India, Japan, Malaysia, and Indonesia in the Asia Pacific contributes a large share in the global logistics services market. India being an agriculture-based country engages large export of commodities such as rice, cotton, and dairy whereas China holds a major share in logistics services owing to presences of a large manufacturing base. India collected a USD 3800 billion trade surplus of agriculture, fishery and forestry goods, in 2016. According to the Ministry of Food Processing Industries, near about 1.7% of GDP is contributed by the food processing sector.
The European logistics services market is experiencing significant move as many countries newly joined EU that has permitted cumulative growth of Eastern as well as Western Europe. Further, outsourcing and relocation of logistics operations at a relatively reduced cost, growing trade businesses that are export and import activities aids in logistics market expansion in Europe. Additionally, logistics service providers are going green from the past few years in the region; as the government is emphasizing and encouraging the logistics and transport industry to involve and engage more in environmental work. Germany has emerged out as a prominent country in the European Union, while the U.K. and France also attribute considerable share in logistics services market growth.
LAMEA logistics services market possess significant potential to grow during the forecast period 2019—2026. However, start-up companies across Latin America are using innovative technologies such as artificial intelligence (AI), big data, machine learning, and IoT (Internet of things) technology to drag into the logistics service industry. Developing nations such as Argentina and Brazil are possibly the most remarkable market in LAMEA region as the logistics services market has shown immense potential for development due to rising trade and business associated activities among various other developing countries. For instance, the Government of Brazil, launched the second phase of the Logistics Investment Program (PIL), in 2015, that offers concessions for railways, airports, highways and port investment.
Some of the prominent players in the logistics services market are
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