New research from Transport Intelligence (Ti) finds a global contract logistics market facing a downside cliff edge in 2020, as COVID-19 disruption strangle production and freeze retail in key logistics-intensive sector. Indeed, the research finds that COVID-19 has thrust the global contract logistics market into a near-unprecedented state of uncertainty.
Having expanded by a very solid 3.5% in 2019, the contract logistics market achieving such a growth rate in 2020 now appears impossible, even though less than one quarter has passed. Ti’s research finds that, in a scenario of rapid and sustained global success in the fight against COVID-19, the global contract logistics market may still achieve a 2.0% growth rate in 2020. However, should there be a failure to do so, a prolonged epidemic would lead to a severe market downturn. Under these conditions, a global recession would be the backdrop against which the contract logistics market is projected to contract by 10.2%.
Alongside the global growth projection, Ti also analyses the impact of COVID-19 scenarios across the European and North American markets as well as in 12 individual countries globally. The growth projections reveal significant and varying degrees of risk, and the range of growth potential shows how much is at stake for retailers, manufacturers and contract logistics providers in 2020.
“It already feels like a very long time since 2019, which despite not always being a straightforward year for contract logistics – particularly as automotive sales struggled – was actually quite a positive year in growth terms,” said Nick Bailey, Head of Research at Ti. “The big challenge this year though is obviously the spread of COVID-19 and the unprecedented response we’re seeing to it on a global basis. It’s all but inevitable that we’ll have a global recession this year, and contract logistics will suffer. Optimistically we might see a quick recovery as the economy, supply and demand all bounce back and growth returns, but the downside risks are potentially dire for the market.”
The research in Ti’s new Global Contract Logistics 2020: COVID-19 Impact Analysis report also reveals that despite the challenging situation, rapid shifts in consumer demand, buying behaviour and emerging trends are creating opportunities for LSPs that can react and adapt. Not all contract logistics-intensive sectors and sub-sectors are seeing negative impacts. Across grocery, consumer electronics, automotive, fashion and pharmaceuticals and other sectors, distinctly separate and highly divergent growth trajectories are forecast.
This report contains:
Follow this link for more information on Ti’s latest report, Global Contract Logistics 2020: COVID-19 Impact Analysis
Source: Transport Intelligence, March 26, 2020
Author: Transport Intelligence