The global contract logistics market consists of three broad activities: distribution, warehousing, and value-added services.
Ti understands contract logistics’ three core segments as the following:
Ti’s latest data – which is available in full to GSCi subscribers– reveals that distribution represents the largest segment of the contract logistics value chain, both globally and in the three major regions (Asia Pacific, Europe, and North America).
2021 Global Contract Logistics Market Segmentation (%)
The predominance of distribution in the value chain is expected to continue over the next five years; by 2026 Ti’s data indicates that distribution will account for 55.3% of the total contract logistics market. Having a strong, quick, and accessible outbound transport network is therefore likely to become an increasingly important aspect of the logistics value chain, especially with the emergence of numerous distribution trends such as direct-to-consumer methods of delivery and heightened customer demand for quick delivery. Warehousing in turn is expected to represent 36.1% of the total contract logistics market by 2026, slightly less than in 2021. Although prices vary across the global, rents have risen in many urban markets and are showing limited signs of slowing.
Value-added services account for the smallest proportion of the global contract logistics market (9%). This is expected to decrease to 8.6% by 2026 as distribution becomes an increasingly significant aspect of the value chain. However, adoption of value-added services varies by regions, as can be seen below. Value-added services are markedly more popular in both North America and Europe than Asia Pacific. This is largely due to the differences in economic and geographical make-up of the regions; Asia Pacific is made up of significantly more under-developed economies and under-developed logistics markets than Europe or North America.
Major Markets Contract Logistics Market Segmentation 2021
Ti’s data shows that over the next year the global distribution market is expected to grow the quickest, at a pace of 7.3% y-o-y. This is followed by the warehousing market (6.9%) and then the value-added services market (6.5%).
Additional exclusive data regarding the contract logistics market is available to GSCi subscribers. Supply chain strategists can use GSCI – Ti’s online data platform – to help them navigate their way through the economic downturn.
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Source: Transport Intelligence, 15th September 2022
Author: Nia Hudson
