Logistics Service Market Revenue Accounted for US$ 1,122.58 Bn in 2018 and is Expected to Grow at a CAGR of 6.9% | Lead By United Parcel Service, Robinson Worldwide, Nippon Express, FedEx, DB Schenker

The Global Logistics Service Market revenue accounted for US$ 1,122.58 Bn in 2018 and is expected to grow at a CAGR of 6.9% during the forecast period 2019 – 2027, to account to US$ 2,029.38 Bn by 2027. Globally, the market continue to witness a surge in demand for logistics services owing to rise in trade activities especially from emerging economies.

As per the LPI (Logistics Performance Index) published by the World Bank, Europe’s score was 3.68, which was the relatively highest score in 2018. Europe’s leadership as the LPI score is majorly attributed to its robust infrastructure, custom services, logistics competence, timeliness and tracking and tracing abilities. The timeliness factor has been derived as a vital contributor to Europe’s position in the global LPI, which was 4.04. Furthermore, snowballing interest of the manufacturing, automotive, retail, and other industries in outsourcing of the logistics services has also fueled the growth of the logistics service market in Europe. Besides, persistent propulsion in industrialization 4.0 is also expected to contribute to the growth of the logistics service market, as the production index of the region enhances and the demand for timely and complicated delivery would also increase. Warehousing, inventory management, and transportation are some of the popular logistics services that are highly outsourced in the European region. However, the key challenge faced by the logistics service providers in the region is to gain profits despite the surging price pressure from the end-consumers.

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The prominent market players operating in the market are CEVA Logistics, PANALPINA WORLD TRANSPORT (HOLDING) LTD., United Parcel Service (UPS), C.H. Robinson Worldwide, Inc., A.P. MOLLER – MAERSK, Nippon Express, FedEx, DB Schenker, DHL International GmbH, and KUEHNE + NAGEL to name a few prominent market players operating in the market.

In North America, the development of logistics services was majorly influenced by the factors such as time, cost, increased internationalization, competition, virtual organization, and high consumer awareness. Some of the major logistics services providers in North America include DHL Supply Chain North America, XPO Logistics, Ryder Supply Chain Solutions, GEODIS North America, and Americold. Amongst them, in 2017, DHL Supply Chain North America had 673 warehouses with 119 Bn square feet capacity. However, it is found that, the leading logistics services providers in North America has to deal with overcapacity and underutilization of their physical and human resources. Moreover, the growing e-commerce industry of the region is also flourishing thus, propelling the growth of logistics. According to the World Bank, the North American logistics sector is highly developed scoring 3.89 in the LPI index of 2018. The highly developed logistics sector of the region further allows logistics services market to flourish. With the blooming e-commerce industry in the U.S., DHL recently announced its plans to open innovation center near Chicago dedicated for the development of new tools to help handle the acceleration in e-commerce demand. In 2017, XPO Logistics expanded its ten year partnership with Sealed Air Corporation with a new multi-year contract through the rollout of a North American-based integrated warehousing and logistics management program. Also, with the blooming e-commerce market, the market is anticipated to gain momentum.

Globally, the various leading provider of logistics service provides a broad range of customized as well as end-to-end logistics solutions for different end-user industries. As a result, based on logistics provider, the market is broadly classified into first & second party logistics, third-party logistics, fourth party logistics, and fifth party logistics. Further, based on the mode of transportation, the market is segmented into railways, roadways, airways, and waterways. Whereas, by end-users, the market is divided into government & public utilities, healthcare, industrial manufacturing, retail & consumer goods, aerospace & defense, and others. And finally, by organization size, the market is bifurcated into the small & medium enterprise and large enterprise. Geographically, the market is segmented into North America, Europe, Asia-Pacific, Middle East & Africa, and South America.

The global manufacturing industry has witnessed rapid growth in recent times owing to huge investments coming up from Governments of various countries and especially the developing economies. As per the China Federation of Logistics and Purchasing (CFLP), the global manufacturing purchasing managers index (PMI) accounted 55.1 in October 2017, which was down from 55.9 in September 2017 however, still at a comparatively high level. The PMI index remained above 53.5 since the beginning of 2017, signifying a steady recovery of the manufacturing sector in developed countries. The services offered by Logistics Services providers add substantial value to the manufacturing companies. These firms enabled different companies to reduce weak points that outcomes in loss of revenue or profits and further help to assure maximal profitability. Logistics service providers specialize in network analysis, mode network optimization, management of vendor compliance, and other management operations. In contrast with this, it is challenging for the core companies to gain such expertise such as inventory management & storage, assembly needs, or shipping, etc. in every business division.

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Globalization has led to increasing domestic and international trade relations between nations. Further, as many international companies lean towards globalization and market expansions, logistical challenges have become more complex than ever. The logistical complexities have multiplied mainly due to the diverse nature of consumer demands observed in different regions of the world pertaining to any product. For successful market expansions, organizations focus on increasing the product assortments catering to the needs of the local market, giving rise to a highly diverse portfolio of products. The larger the diversity, the higher is the complexity of the supply chain for the organization to manage efficiently in delivering products as well as services.

The report segments the global logistics service market as follows:

Global Logistics Service Market – By Mode of Transportation

  • Roadways
  • Railways
  • Waterways
  • Airways

Global Logistics Service Market – By Logistics Provider

  • First & Second Party Logistics
  • Third Party Logistics
  • Fourth Party Logistics
  • Fifth Party Logistics

Global Logistics Service Market – By Organization Size

  • Small & Medium Enterprise
  • Large Enterprise

Global Logistics Service Market – By End-user

  • Government & Public Utilities
  • Healthcare
  • Industrial Manufacturing
  • Retail & Consumer Goods
  • Aerospace & Defence
  • Others

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