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CONTRACT LOGISTICS MARKET REPORT OVERVIEW
The global contract logistics market size was USD 178180 million in 2019 and will touch USD 233410 million by 2026, exhibiting a CAGR of 3.9% during the forecast period.
Contract logistics refers to the outsourcing of logistics and distribution activities to a third-party service provider. In other words, a company (the client or shipper) contracts with a logistics service provider to handle various aspects of its supply chain and distribution processes. This can include the management of transportation, warehousing, order fulfillment, and other logistical functions. The logistics service provider typically manages warehouses and distribution centers where they store and handle the client's inventory. This involves activities such as order picking, packing, and shipping. Contract logistics providers often handle transportation services, which may include the movement of goods from manufacturing facilities to warehouses, and from warehouses to distribution points or directly to customers.
This involves processing and fulfilling customer orders. The logistics provider may manage the entire order fulfillment process, from receiving orders to delivering products to end customers. Contract logistic providers are responsible for monitoring and managing inventory levels to ensure that the client's supply chain operates efficiently. This may involve implementing technologies such as warehouse management systems (WMS) and inventory tracking systems. Contract logistics is often tailored to meet the specific needs of the client. The service provider works closely with the client to design a logistics solution that optimizes efficiency and reduces costs. Contract logistic providers often leverage technology solutions to enhance visibility, track shipments, and optimize the overall supply chain. This can include the use of tracking systems, RFID technology, and other tools.
COVID-19 Impact: Shifts in Demand Patterns to Hinder Market Growth
The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to market’s growth and demand returning to pre-pandemic levels.
The pandemic led to widespread disruptions in global supply chains due to lockdowns, travel restrictions, and workforce challenges. This affected the movement of goods, production schedules, and the overall efficiency of supply chain operations. Consumer behavior changed rapidly during the pandemic, leading to shifts in demand patterns. Certain industries, such as e-commerce and healthcare, experienced increased demand, while others, such as the automotive and aerospace sectors, faced significant downturns. Contract logistic providers had to adapt quickly to these changes. With lockdowns and social distancing measures in place, there was a surge in online shopping. Contract logistic providers supporting e-commerce saw increased demand for services related to order fulfillment, last-mile delivery, and returns processing.
LATEST TRENDS
"Technology Integration to Drive Market Growth"
The growth of e-commerce continues to drive demand for contract logistics services. Providers are focusing on developing efficient and flexible solutions to meet the unique challenges of e-commerce, including last-mile delivery and returns management. The adoption of technology, including automation, artificial intelligence, and data analytics, is a ongoing trend. These technologies are being used to enhance visibility, improve efficiency, and optimize various aspects of the supply chain. There's a growing emphasis on sustainability within the logistics industry. Contract logistic providers are implementing eco-friendly practices, such as the use of electric vehicles, renewable energy sources, and sustainable packaging solutions, to reduce their environmental impact.
CONTRACT LOGISTICS MARKET SEGMENTATION
- By Type
Based on type the global market can be categorized into land transportation, air transportation and sea transportation.
Land Transportation: Land transportation involves the movement of goods and passengers over land surfaces. It includes various modes such as road and rail. Involves the use of vehicles on roads, including trucks, vans, and buses.
Air Transportation: Air transportation involves the movement of goods and passengers by aircraft. Specialized carriers focused on transporting goods. Passenger airlines that may also carry cargo in their holds.
Sea Transportation: Sea transportation involves the movement of goods and passengers by ships on oceans and seas. Common for standardized cargo in containers.
- By Application
Based on application the global market can be categorized into small enterprises and large enterprises.
Small Enterprises: Small enterprises, also known as small businesses, are characterized by their relatively small size in terms of workforce, revenue, and assets. The exact criteria for classifying a business as small can vary by country and industry.
Large Enterprises: Large enterprises, also known as corporations or big businesses, are characterized by their significant size, extensive resources, and complex organizational structures. The classification as a large enterprise is often based on criteria such as the number of employees, annual revenue, and total assets.
DRIVING FACTORS
"E-commerce Growth to Augment the Market"
Many companies choose to outsource their logistics functions to third-party providers to focus on their core competencies. Contract logistic allows businesses to leverage the expertise of specialized logistics providers, reducing the burden of managing complex supply chain operations in-house. The expansion of global trade and the growth of international markets contribute to the increased complexity of supply chains. Contract logistic providers offer expertise in navigating international regulations, customs processes, and transportation networks, making them essential partners for businesses engaged in global trade. The rapid growth of e-commerce has transformed supply chain dynamics. Contract logistic providers play a crucial role in managing the fulfillment needs of online retailers, handling tasks such as order processing, warehousing, and last-mile delivery.
"Supply Chain Complexity to Expand the Market"
Contract logistics offers businesses flexibility and scalability in responding to changes in demand. As companies experience fluctuations in their supply chain requirements, contract logistic providers can adjust their services accordingly, ensuring efficiency and cost-effectiveness. Outsourcing logistics functions can lead to cost savings for businesses. Contract logistics market growth often benefit from economies of scale, advanced technologies, and specialized expertise, enabling them to operate more efficiently and cost-effectively than in-house logistics operations. The increasing complexity of supply chains, including multi-modal transportation, diverse sourcing, and just-in-time inventory models, makes it challenging for companies to manage their logistics internally. Contract logistic providers bring specialized knowledge and capabilities to navigate this complexity.
RESTRAINING FACTOR
"Complexity of Integration to Potentially Impede Market Growth"
Implementing contract orchestration solutions often requires a significant initial investment in infrastructure, technology, and personnel. For some businesses, especially smaller ones, this upfront cost can be a barrier to entry or expansion. Integrating contract orchestration services into existing business operations can be complex. Ensuring seamless collaboration between the client and the logistics provider requires careful planning, coordination, and the integration of various systems.
CONTRACT LOGISTICS MARKET REGIONAL INSIGHTS
"North America to Dominate the Market due to highly Developed Logistics Infrastructure"
The market is primarily segregated into Europe, Latin America, Asia Pacific, North America, and Middle East &Africa
The North American region, particularly the United States, has been a leading contract logistics market share. The U.S. has a highly developed logistics infrastructure, a robust e-commerce sector, and a large consumer market. The presence of major international airports, extensive road networks, and advanced technology adoption contribute to the prominence of North America in the contract logistic space. The region is well-established logistics hubs and serve as gateways to the broader European market. The European Union's open market and streamlined customs processes also contribute to the growth of contract logistic in the region.
KEY INDUSTRY PLAYERS
"Key Industry Players Shaping the Market through Innovation and Market Expansion"
The market is significantly influenced by key industry players that play a pivotal role in driving market dynamics and shaping consumer preferences. These key players possess extensive retail networks and online platforms, providing consumers with easy access to a wide variety of wardrobe options. Their strong global presence and brand recognition have contributed to increased consumer trust and loyalty, driving product adoption. Moreover, these industry giants continually invest in research and development, introducing innovative designs, materials, and smart features, catering to evolving consumer needs and preferences. The collective efforts of these major players significantly impact the competitive landscape and future trajectory of the market.
List of Market Players Profiled
- CEVA Logistics (France)
- Agility (Kuwait)
- APL Logistics (Singapore)
- GAC (U.A.E)
- DB Schenker Logistics (Germany)
INDUSTRIAL DEVELOPMENT
January, 2020: The integration of advanced technologies is a significant driver of industrial development in contract logistics. Automation, robotics, artificial intelligence, and data analytics are being increasingly utilized to enhance efficiency, accuracy, and visibility in logistics operations.
REPORT COVERAGE
The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.
The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.
REPORT COVERAGE | DETAILS |
---|---|
Market Size Value In |
US$ 178180 Million in 2019 |
Market Size Value By |
US$ 233410 Million by 2026 |
Growth Rate |
CAGR of 3.9% from 2019 to 2026 |
Forecast Period |
2022-2026 |
Base Year |
2023 |
Historical Data Available |
Yes |
Regional Scope |
Global |
Segments Covered |
Types & Application |
Frequently Asked Questions
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What value is the contract logistics market expected to touch by 2026?
The contract logistics market is expected to reach USD 233410 million by 2026.
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What CAGR is the contract logistics market expected to exhibit by 2026?
The contract logistics market is expected to exhibit a CAGR of 3.9% by 2026.
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Which are the driving factors of the contract logistics market?
E-commerce growth and supply chain complexity are the driving factors of the market.
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What are the key segments of the contract logistics market?
Land transportation involves the movement of goods and passengers over land surfaces. It includes various modes such as road and rail. Involves the use of vehicles on roads, including trucks, vans, and buses.