Contract Logistics Market Size Report | Growth Overview 2025

Contract Logistics Market to 2025 - Global Analysis and Forecasts by Type (Outsourcing and Insourcing); Services (Transportation, Warehousing, Packaging Processes and Solutions, Distribution, Production Logistics, and Aftermarket Logistics); and End-user (Aerospace, Automotive, Consumer, High-Tech, Industrial, Pharma & Healthcare, and Retail)

Publication Month : Jan 2019

  • Report Code : TIPEL00002034
  • Category : Automotive and Transportation
  • Status : Published
  • No. of Pages : 187
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[Research Report] The contract logistics market was valued at US$ 203,938.8 million in 2017 and is projected to reach US$ 298,822.0 million by 2025; it is expected to grow at a CAGR of 5.0% from 2018 to 2025.

Analyst Perspective:

The contract logistics market is vital to the global supply chain industry, providing specialized services to companies across various sectors. Contract logistics involves outsourcing logistics activities to third-party providers, allowing businesses to focus on their core competencies while benefiting from the expertise and efficiency of logistics specialists. In recent years, the contract logistics market has experienced significant growth due to several factors. Firstly, globalization has increased international trade, resulting in higher demand for efficient and cost-effective logistics solutions. As companies expand their operations to new markets, they often rely on contract logistics providers to manage complex supply chains and ensure seamless distribution of goods.

The advancements in technology have revolutionized the logistics industry, driving the adoption of innovative solutions in contract logistics. Automated systems, including warehouse and transportation management systems, enable improved inventory management, real-time tracking, and streamlined operations. Technology integration has enhanced efficiency, visibility, and overall supply chain performance. Furthermore, the e-commerce boom has profoundly impacted the contract logistics market. With the rise of online retail, companies require robust logistics infrastructure to handle increasing volumes of orders, manage fulfillment centers, and execute last-mile deliveries. Contract logistics providers have offered tailored solutions, such as warehousing, order processing, and value-added services, to support e-commerce operations. Major companies in this sector offer various services, including transportation, warehousing, packaging, order fulfillment, and reverse logistics. They cater to diverse industries, such as retail, automotive, pharmaceuticals, consumer goods, and manufacturing. To meet the evolving demands of customers, contract logistics providers are increasingly focusing on sustainability and environmental responsibility. They strive to optimize transportation routes, reduce carbon emissions, and implement eco-friendly practices throughout the supply chain. This sustainability-oriented approach aligns with the growing environmental concerns and enhances the reputation and attractiveness of contract logistics providers in the market.

Market Overview:

The movement of commodities from one location to another is called logistics. Contract logistics is the whole procedure from production to distribution at the point of sale. It is a more comprehensive plan of action that incorporates supply chain management procedures with traditional logistics. The businesses that work in the contract logistics sector undertake tasks like managing the supply chain, warehousing, shipping, distributing products, processing orders, and collecting payments, keeping track of inventories, and even performing customer support. This is the practice of assigning work related to resource management to outside service providers.

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Contract Logistics Market: Strategic Insights

contract-logistics-market
Market Size Value inUS$ 203,938.8 Million in 2017
Market Size Value byUS$ 298,822.0 Million by 2025
Growth rateCAGR of 5.0% from 2018-2025
Forecast Period2018-2025
Base Year2018
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Market Driver:

Exponential Growth Of E-Commerce to Drive Growth of Contract Logistics Market

The exponential growth of e-commerce has emerged as a powerful driver for the contract logistics market, fueling its expansion and development. This growth is attributable to several factors highlighting the symbiotic relationship between e-commerce and contract logistics. Firstly, the surge in online retail has resulted in increased demand for efficient logistics solutions. E-commerce companies require seamless order fulfillment, streamlined inventory management, and reliable last-mile delivery services to meet the expectations of digitally connected consumers.

Contract logistics providers specialize in offering these services, leveraging their expertise and infrastructure to support the growing needs of e-commerce operations. The complexity of managing e-commerce logistics has prompted businesses to seek specialized assistance. E-commerce supply chains involve multiple touchpoints, including product sourcing, inventory storage, order processing, packaging, and transportation. Contract logistics providers have the knowledge and resources to navigate these intricacies effectively. They offer tailored solutions to optimize e-commerce logistics processes, ensuring smooth operations and customer satisfaction. Moreover, the time-sensitive nature of e-commerce requires fast and reliable delivery. Contract logistics providers are critical in optimizing last-mile logistics, which involves transporting goods from distribution centers to end consumers. They utilize their extensive transportation networks, route optimization techniques, and real-time tracking capabilities to ensure timely and efficient deliveries. By meeting the increasing expectations for quick and reliable shipping, contract logistics providers contribute to the success of e-commerce businesses.

The scalability and flexibility offered by contract logistics providers align with the dynamic nature of the e-commerce sector. As online retailers experience seasonal spikes, promotional campaigns, or market expansions, they require a logistics partner capable of adapting to changing demands. Contract logistics providers can rapidly scale their operations, adjust storage capacity, and optimize resources to accommodate fluctuations in e-commerce volumes, providing businesses with the agility needed to thrive in a fast-paced digital marketplace.

Segmental Analysis:

Based on type, the contract logistics market is segmented into outsourcing and insourcing. The insourcing segment held the largest share of the market in 2020 and is anticipated to register the highest CAGR in the market during the forecast period. The insourcing segment in the contract logistics market has emerged as the largest share. This indicates that many businesses have managed their logistics operations internally rather than outsourcing them to third-party providers. Factors contributing to this trend include the desire for operational control and flexibility, possessing the necessary resources and infrastructure, safeguarding intellectual property, and meeting industry-specific requirements. While insourcing dominates the market, outsourcing remains significant as companies recognize the benefits of specialized expertise, technology-driven solutions, and focusing on core competencies.

Regional Analysis:

The Asia Pacific contract logistics market was valued at US$ 80.96 billion in 2017 and is projected to reach US$ 126.10 billion by 2025; it is expected to grow at a CAGR of 5.8% during the forecast period. The Asia Pacific region has occurred as the dominant force in the contract logistics market, showcasing robust growth and a significant market share. Several factors contribute to the region's dominance in the market.

The Asia Pacific region is home to some of the world's largest economies, including China, Japan, India, and South Korea. These countries have witnessed rapid industrialization, urbanization, and a surge in consumer demand, driving the need for efficient logistics services. As businesses expand their operations in these growing markets, the demand for contract logistics providers to manage complex supply chains and distribution networks has soared. Moreover, the Asia Pacific region has established itself as a global manufacturing hub, with many multinational companies establishing production facilities and sourcing operations in countries like China and India. This manufacturing strength has increased demand for contract logistics services, as companies require efficient transportation, warehousing, and distribution solutions to manage the movement of goods within the region and across international borders.

The e-commerce boom in the Asia Pacific region has also contributed to its dominance in the contract logistics market. The region has witnessed a rapid increase in online retail activities, driven by a large consumer base, rising internet penetration, and changing consumer preferences. E-commerce companies in the region require robust logistics infrastructure to handle the growing volumes of online orders and ensure timely customer deliveries. Contract logistics providers play a crucial role in supporting the e-commerce ecosystem by offering specialized services tailored to the unique needs of online retail. The Asia Pacific region has diverse and fragmented markets, infrastructure, and complex regulatory environments. Navigating these challenges requires in-depth local knowledge and expertise, which local contract logistics providers possess. These providers deeply understand the region's logistics landscape, cultural nuances, and regulatory requirements, enabling them to offer custom resolutions that fulfill the specific needs of businesses in the Asia Pacific region.

Key Player Analysis:

The contract logistics market analysis consists of the players such as Deutsche Post AG, XPO Logistics Inc., Kuehne + Nagel International AG, CEVA Logistics AG, DB Schenker, Hitachi Transport System Ltd, Geodis, Neovia Logistics Services, UPS Supply Chain Solutions, and Ryder System. Among the players in the contract logistics Neovia Logistics Services and Deutsche Post AG are the top two players owing to the diversified product portfolio offered.

Recent Developments:

 

Inorganic and organic strategies such as mergers and acquisitions are highly adopted by companies in the contract logistics market. A few recent key market developments are listed below:

  • In January 2022, Penske collaborated with Röhlig Logistics, a provider of logistics services to form a new joint venture company called Rohlig Penske Logistics GmbH, operating primarily in Germany and the Netherlands.
  • In December 2021, A.P. Moller – Maersk one of contract logistics market leader announced the signing of an international freight supply chain management partnership with Unilever, which is a significant player in the FMCG space to combine the execution of its global ocean and air transport, intending to enhance visibility, increase efficiency, and drive reductions in emissions across its operations.
Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Type ; Services ; and End-user

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

US, Canada, Mexico, UK, Germany, Spain, Italy, France, India, China, Japan, South Korea, Australia, UAE, Saudi Arabia, South Africa, Brazil, Argentina

Frequently Asked Questions


What are reasons behind contract logistics market growth?

The growth of the contract logistics market is primarily attributed to the swift growth of manufacturing industry & their focus laid on core competencies and burgeoning needs for achieving cost efficiency, task optimizations and technological integrations pertaining to supply chain activities. Moreover, the benefits in managing seasonal variations of products is likely to boost the growth of the market.

Which logistics type is expected to dominate the market in the forecast period?

Insourcing logistics type is dominating the in the type segment and is expected to dominate the market in the forecast period owing to its major feature of offering a complete visibility of the supply chain operations of shipments.

What are market opportunities for contract logistics?

The unprecedented growth rate of the e-commerce sector is expected to create significant opportunity of the contract logistics market growth. Further, the market is expected to be in favor of Middle East & Africa and North America, which is anticipated to witness remarkable growth rate in the forecast period owing to the increase in demand for service integration, data management, and inclination of manufacturers towards more flexible solutions.

The List of Companies

1. Deutsche Post AG
2. GEODIS
3. DB Schenker
4. Hitachi Transport System, Ltd.
5. Kuehne + Nagel International AG
6. XPO Logistics, Inc.
7. Ryder System, Inc.
8. CEVA Logistics AG
9. Neovia Logistics Services, LLC
10. UPS Supply Chain Solutions

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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