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The Asia Pacific region’s share in the global contract logistics market is expected to grow to 42% in 2025 from 38% in 2023, according to the latest report by Ti Insight
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The Global Contract Logistics Market Size and Forecasting: 2024-2028 projects the Asia Pacific market will handle a volume worth 123,692.9 million euros this year
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By 2028, the global contract logistics market is projected to have a compound annual growth rate of 4.2% to 348,881.4 million euros
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The 2024 market was expected to have grown by 3.6% in 2024, with sluggish retail impacting growth
The Asia Pacific region is expected to retain the lead as the biggest contract logistics market well into the decade, with no indication that Europe or North America can compete in terms of market size, according to the latest report by Ti Insight.
The Global Contract Logistics Market Size and Forecasting: 2024-2028 projects Asia Pacific will have a market share of 42% in 2025, up from 38% in 2023. The region will handle volume worth 123,692.9 million euros this year.
All the world’s regions saw positive growth in 2023, a trend set to continue in the forecast period, Ti Insight said.
By 2028, the global contract logistics market is projected to have a compound annual growth rate of 4.2% to 348,881.4 million euros. The Asia Pacific market is seen to rise by a CAGR of 6.9%, North America by 2.8% and Europe by 1.7%.
Market in 2024
With sluggish retail affecting growth, Ti Insight expects the 2024 market to have grown by 3.6% (value: 294,264.8 million euros) in 2024. This is in contrast to the previous projection, made in June 2024, of a 4.2% annual growth.
The first semester of 2024 saw slower than expected growth in the Americas and Europe, impacting the similarly under-performing Asia Pacific region.
The projected recovery was affected by such factors as high inflation, uncertain economic developments, geopolitical conflicts, and labor shortages, according to the Ti Insight.
The report said “recovery has not been immediate or palpable” despite inflation falling, while “ongoing geopolitical political issues in the Red Sea and Europe have softened demand.”
On the plus side, “contract logistics is resilient to political and economic shocks,” said Ti Insight. This can be seen in DHL Supply Chain’s 2023 results that reflected the global trend.
Overall market revenues in 2024 were up 3.2% year-on-year with the Americas experiencing 2.5% growth, the Asia Pacific, 5.1%, and Europe, the Middle East, and Africa, 3.2%.
The continued growth of e-commerce has been a key trend among integrators, with China’s parcel carriers seeing annual volume growth of more than 15%.
This helped drive the Asia Pacific contract logistics market, and integrators such as DHL Supply Chain attribute much of their growth to taking on e-commerce vendors as clients.
E-commerce is showing strong growth in almost every market, from smaller countries like Canada to global engines like the US and China.
Where growth in services drives GDP growth, retail has been sluggish, and this has had an impact on contract logistics.
Asia’s emerging economies have driven growth, with Ti forecasting 7.1% year-on-year growth in 2024 and 7.2% this year.
North America will likely grow more slowly to 1.7% in 2024 and 3.2% in 2025.
Europe, meanwhile, will likely hold back worldwide growth with a forecast of 0.7% in 2024 and 1.8% in 2025.
Ti Insight cited the International Monetary Fund projection that noted global GDP growth will be stable, yet underwhelming in 2025.
GDP growth in 2024 has been driven by East Asia, as Europe is expected to grow more slowly than originally forecast. North American, primarily led by the US, is seen to grow slightly more quickly than originally forecast.
The IMF stated that its forecast of 3.1% GDP growth was “mediocre” compared to pre-pandemic average.
