The global contract logistics market contracted by 3.3% in 2020, ending a decade-long growth streak, according to new research from Transport Intelligence (Ti). Momentum towards the end of the year prevented further declines as the COVID-19 pandemic receded in major markets across Asia Pacific, Europe and North America.
A pickup in manufacturing and production compared to early pandemic lockdown measures and stronger levels of consumer spending bode well for the year ahead, but the potential for spending to reorientate away from goods expenditure and towards the services sector weakens prospects slightly. Nevertheless, the economic rebound will be sufficient to drive strong contract logistics growth in 2021 of 6.5%.
Ti’s COVID Recovery Tracker reveals the extent of the global contract logistics market’s recovery. The COVID Recovery Tracker (CRT) indicates that the global market will be 2.9% larger compared with pre-COVID-19 levels (the market size in 2019 at prices and exchange rates constant at 2020 levels).
The global contract logistics market is projected to grow at a real 2020-2025 CAGR of 5.1%, and the CRT for 2025 shows the market will be 24.0% larger when compared with 2019, signifying a robust rebound from the economic effects of the pandemic.
“The consequences of the COVID-19 shock to the global economy are difficult to predict, due to its unprecedented nature. However, global and regional developments will create varying degrees of recoveries. The US-China tensions are set to disrupt established supply chains in those regions,” said Andy Ralls, Senior Quantitative Analyst at Ti. “Meanwhile, Europe is still grappling with an effective rollout of its vaccine programme, which curbs a rapid recovery, though comprehensive recovery funds will likely provide a lifeline to several economies,” he added.
Global Contract Logistics 2021 also takes a look at the market’s ongoing evolution. The report analyses the effects of M&A on its development and argues that the largest contract logistics players will look very different from today as investment activity and strategic imperatives drive investment activity on a global basis. Further change will also be driven by the wide-ranging technological development the logistics industry continues to see, with Global Contract Logistics 2021 showing that the development of robotics, sensors, 3D printing and wearable devices amongst others will have as profound an effect on operations as the fallout from the Covid-19 pandemic.
“The global contract logistics market was dealt a number of blows during the Covid-19 pandemic, notably from the closure of retail and manufacturing locations as public health measures were implemented causing consumer demand to vanish. As Ti’s market size forecasts show, however, the rebound is expected to be strong. The rapid growth we expect to see in the market over the next five-years will be accompanied by an even quicker pace of technological change, and alongside this, 3PLs will have to react to increased demand for more sophisticated and responsive services,” said Nick Bailey, Head of Research at Ti.
To find out more about Ti’s latest report, Global Contract Logistics 2021, please follow the link.
Source: Transport Intelligence, August 10, 2021
Author: Transport Intelligence
NEW market report:
Global Contract Logistics 2021 contains: