Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Freight and Logistics Market are estimated to grow at a CAGR of approximately 5% during the forecast period.

Amidst a slowdown in global economic growth, in part caused by trade tensions between the US and China, the logistics industry remains buoyant. Asia pacific logistics industry growing rapidly due to the increasing logistics in the ASEAN countries and the presence of major economies like China and India. Additionally, the high government support for the logistics sector in the region is also a factor boosting the industry growth.

The slowdown in world trade is expected to hit the air the cargo market's volume growth and yield performance, as freight capacity growth is expected to outstrip demand due to weakened consumer confidence. Rail freight is expected to gain traction, supported by infrastructure development and regional rail network expansion with the increased deployment of transfer hubs powering inter-modal transportation.

World trade has been very volatile over the past decade, with underlying development being driven – until very recently – by strong growth of export and import traffic from China and related economies.

The outsourcing of logistics has been one of the defining trends of the global logistics industry. The logistics provider’s importance has risen considerably with the ongoing trend towards outsourcing non-core competences

Logistics industry majors across the value chain are expected to prioritize operational efficiencies, with investments in technology adoption. Freight forwarders that offer innovative online solution offerings in freight matching, custom brokerage, and transportation management solutions are expected to transform the segment with enhanced customer experience. The warehousing industry is expected to transform significantly with process automation due to the emergence of cross-border eCommerce and increasing demand for integrated supply chain solutions.

Rapid growth in the eCommerce market would intensify competition among eCommerce logistics solution providers. Innovation in order fulfillment, delivery models, and value-added services is expected to reshape the last-mile delivery segment.

Manufacturers and retailers have increased both the level of global sourcing and the scope of the markets that they supply. Many logistics companies have chosen to globalise their operations in line with the changing requirements of their clients.

Freight & Logistics Market TrendsAsia Pacific holds the largest share in the market:

Leading countries in the region are observing faster technological integration in the logistics process. In India, 80% of freight moves by road, and the trucking industry is adopting industry-leading tracking technology to help trace and predict the exact delivery times. Thailand is incorporating IBM and Maersk’s blockchain project to streamline its shipment monitoring processes.

Increasing intra-Asian trade, along with a growing increase in imports not only for manufacturing inputs but also consumer products, characterizes Asian logistics. China’s Belt and Road Initiative has led to huge investment in transport infrastructure across the region as it seeks to integrate with Asian and European markets, as well as exert political muscle on the regional stage.

Most of the cargo is destined for the US and Europe via the main East-West trade lanes. However, the trend of the last few years has been the rise to prominence of intra-Asia trade. Although countries such as China, Japan, and South Korea boast huge, modern container ports, other Asia Pacific nations are spending billions on upgrades to keep up with the demand for containerised goods.

E-Commerce is driving the logistics Industry:

The rise of e-commerce and the digital marketplace phenomenon has changed the composition of consumer buying behavior and expectations, as consumers now expect fast, free shipping, and competitive pricing. This demanding delivery schedule challenges traditional logistics and supply chain models, and companies are now forced to adjust their strategies to provide the low-cost and on-demand delivery service that consumers now demand. E-commerce represents a growing share of the retail market, This exponential growth and demand will undoubtedly impact the logistics and transportation industry as companies will need to be prepared to manage increased volume and delivery expectations.

Freight & Logistics Market Competitive Analysis

The Freight and Logistics market is Consolidated due to the top 5 companies hold more than 50% market share in the industry. The market is expected to grow further during the forecast period as there is an increase in the E-commerce sector and growing infrastructure across the Asia Pacific region and other emerging countries would push the demand for the logistics and freight sector.

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