Contract Logistics Market: Global Industry Analysis and Forecast (2024-2030) Trends, Statistics, Dynamics, Segment Analysis

Contract Logistics Market was valued at US$ 281.19 Bn. in 2023 and the total revenue is expected to grow at 7.6% of CAGR through 2024 to 2030, reaching nearly US$ 470.75 Bn.
Contract Logistics Market Overview:
Contract logistics is a long-term collaboration that includes a wide variety of services ranging from product or spare part delivery to ultimate end-customer customer delivery. This involves having the necessary equipment for the variety of services provided, such as warehouses, human resources, appropriate equipment, stock management, dispatch follow-up, after-sales service, and so on.

The supplier of logistics services becomes a vital link in the chain that connects all of the industrial company's or retailer's partners and ensures their correct operation. Contract logistics are a great alternative for partners that are frequently involved in long-term logistical service contracts to drive the contract logistics market

The primary benefit of contract logistics is resource savings. They are not only financial investments, such as renting a warehouse, purchasing cars, or recruiting employees, but they also save time. Because a 3PL warehouse is located near an end customer, for example, it is possible to eliminate long and expensive product shipping. However, this is not the only benefit of adopting contract logistics. The report covers details of market key players and contracts logistics market driving factors by region.To know about the Research Methodology :- Request Free Sample Report
Contract Logistics Market Dynamics:
Demand for Logistics Software development highly penetrate the market

Technology continues to disrupt logistics and supply chain systems by significantly changing them. The rising usage of IoT and new technologies across sectors will boost the implementation of the contract logistics market. The adoption of logistics software improves operations and eliminates process headaches. Organizations that invested in logistics management software saw significant improvements in process, operations, and delivery to drive the contract logistic market growth. To change logistics operations, the sector is expected to adopt cloud, mobile, and new technology. These technological advancements are expected to have an impact on logistics and supply chains in 2023.

Artificial Technology, that is AI will be used by logistics organizations to discover patterns in data and churn insights. It will help in the advancement of operations such as intelligent transportation, route optimization, demand forecasting, and budget planning, among others. AI-driven logistics optimization may save money through real-time forecasting and behavioral coaching to drive the contract logistics market. In the logistics and transportation market, the potential incremental value of AI (89%) will be greater than that of Other.

Real-time pricing updates, inventory, and tracking are possible with cloud-integrated logistics management software. Cloud-based logistics software offers real-time accuracy and 360-degree process and system control. A product's lifespan may be tracked from ordering through distribution. It provides for huge cost savings on lost items and delayed deliveries, as well as the ability to track a shipment at any step of travel and redirect a misdirected consignment. Cloud-based logistics software enables all members of a trade network to connect and exchange data in real time, make rapid decisions, and grow on demand of the contract logistics market.

Innovative logistic robotic organizations have worked hard over the last few decades to integrate AI and machine learning, improved sensors and reaction capabilities, warehouse management software, and logistics management software. Warehouse robotics in the supply chain has recently accelerated in recent years. The industry has received massive finance and investment. Alibaba, for example, invested $15 billion in robotic logistics infrastructure, while Google contributed $500 million in JD's automated logistics. It is also expected that by the end of 2021, the global market for warehouse robotics in the supply chain would be worth $22.4 billion.

Blockchain, also known as distributed ledger technology, allows for the safe and permanent recording of transactions between individuals. Blockchain-enabled shared and secure databases help in the elimination of middlemen and third parties who verify records, and coordinate transactions in a supply chain to drive the contract logistics market. Blockchain improves the authenticity and trust of shared data, digitizes tangible assets such as contracts and important documents, streamlines administrative operations, reduces expenses, and enables effective audits of supply chain data in the contract logistics market.

Cloud-Based Saas creating a future in the contract logistics market

As cloud computing gains traction in 2021, a whole new method of data processing is revealed. The supply chain and logistics operations have been changed by technological advances in 2021. Increased use of supply chain and logistics solutions in 2021 will result in a move from on-premise to SaaS.

According to forecasts, a subscription-based SaaS model will dominate supply chain management by 2023 and beyond. Adopting a cloud-based supply chain system provides advantages such as flexibility, resilience, and cost. The adoption of free and open-source software has made the Cloud the preferred alternative for logistics companies and organizations globally to drive the contract logistics market.

Cloud-based SaaS supply chain systems provide various advantages. It offers a comprehensive view of entire logistics operations by making operations more visible and collaborative. Implementing a cloud system lowers both the initial and ongoing costs. It also provides the capacity to scale up to meet the needs of the company and improves supply chain efficiency in the contract logistics market.
Contract Logistics Market Segment Analysis:
Based on Type, the Contract Logistics Market is segmented into Transportation, Warehousing, Distribution, and Aftermarket Logistics. Warehousing logistics held a large market share in 2011. There are several 3PL Logistics Service Providers in the market. There are international players, regional players, local businesses, and personally managed markets.

There would be a requirement for a warehousing facility on way to the factory or the markets, whether the supply chain is for finished items or raw materials. In the case of completed products, these warehouses can be consolidation or merging centers, where different components of the order or finished items are brought in from various places, integrated, and despatched to the next leg of the network. In the case of raw material supply, a country-level consolidation center might be established where all shipments from many purchasers are aggregated and delivered out as a container load.

Such warehousing requirements may not demand the use of specialized facilities. The 3PL service provider who controls the cargo will often have warehouses that are utilized as shared or common facilities. In certain circumstances, purchasers will use public warehouses as well. General cargo warehouses, also known as shared facilities or public warehouses, are warehouses that contain goods from a variety of customers. Materials can be stored per day, week, or month, depending on the needs of the client. Each customer's inventory may not be very large.

Pricing for contract logistics warehouses is segmented into two types fixed price and transaction-based pricing models. A fixed Price is applicable when a buyer contracts a flat space, the pricing model is based on a fixed price each month that includes the cost of space, resources, infrastructure, and so on. Transactional pricing models are popular everywhere there is no set space allotment. There are several variable pricing models. Some common pricing techniques include: per pallet price, per unit or Kg -volumetric weight /volume price, per transaction price, including price per inbound, per shipping, and so on.

Typically, under a transactional price model, the buyer's process is very simple and does not require any particular or committed investments. The 3PL provider typically employs his general or public facility and recovers his entire cost of investment and operations based on transaction volume.Based on the Application, the Contract Logistics Market is segmented into Insourcing and Outsourcing. Outsourcing is expected to dominate the market during the forecast period. Outsourcing logistics is a low-cost way to grow a company's international reach and profitability. Hiring employees and renting storage space is often less expensive than hosting operations in-house. Companies that use an outsourced supply chain may concentrate on their main company operations while developing new ideas, and products, and expanding into new markets.

Outsourcing logistics operations to a reliable partner with extensive expertise and experience may save up significant time and resources. A contract logistics market provides significant flexibility benefits. They may adjust space, labor, and transportation based on the current inventory. They can help smooth the transition between seasons and account for industry fluctuations.Businesses may quickly change their standards to meet their real demands. Furthermore, the contract logistics market may utilize their experience to enhance forecasts, assisting in the optimization of inventory levels and the reduction of holding costs. Client organizations can also develop new distribution channels, transitioning from a primarily B2B approach to an omnichannel model that includes B2C customers.

Based on the Application, the Contract Logistics Market is segmented into Retail, E-Commerce, Manufacturing, and Others. E-Commerce held the largest market share in 2023.

The consumer products and retail industries account for about half of the logistics market, and the growth of e-commerce has increased demand for multichannel distribution, which relies on a single inventory-management system to fulfill orders from both traditional storefronts and e-commerce. Experts forecast that the overall value of multichannel distribution would increase by 7% every year, rising from $600 billion in 2019 to $840 billion by 2025.

Contract logistics can charge up to 50% more than traditional retail fulfillment since e-commerce fulfillment is substantially more difficult. As a result, organizations that can navigate the complexity will benefit the most in the contract logistics market. E-commerce fulfillment often needs more touchpoints than traditional retail logistics due to smaller average order quantities.

Increased internet buying is expected to continue even after the limitations imposed as a result of the epidemic lessen. Even when traditional retail sales rebound, e-commerce is here to stay. However, as a result of complicated customer demands, growing prices, and more competition, the fast rise of e-commerce is beginning to put pressure on the contract logistics market.

Costs are also being driven up by the rising scarcity of warehouse space. According to forecasts, there will be a scarcity of around 190 million square feet of warehouse space within the next five years, which might lead to an increase in leasing rates and put more pressure on the contract logistics market. Furthermore, e-commerce is becoming more competitive, with various new competitors emerging, most notably marketplace providers who offer fulfillment and new technology-led entrants to drive the contract logistics market. As a result, 3PLs must now compete with end-to-end solutions that provide "click-to-door" services.
Contract Logistics Market Regional Insights:
The North American region dominated the market with a 45 % share in 2023. Warehouse renting from logistics players throughout the region has increased dramatically in recent years in the United States. Increasing service standards, such as e-commerce and same-day delivery, are causing retailers to outsource even more of their services.

Canada is the fastest-growing e-commerce market in the region, while the US market is the largest and is gradually increasing. In Mexico, e-commerce user penetration is relatively low, and the Mexican e-commerce sector is predicted to increase at a respectable rate over the next five years. The bulk of e-commerce enterprises gives warehouse and distribution contracts to logistics service providers. High-velocity e-commerce business models need the use of technical solutions that accelerate fulfillment operations.

DHL, XPO Logistics, UPS, FedEx, DB Schenker, and Ryder System are the leading contract logistics operators in North America. However, the North American contract logistics industry is fragmented, with a significant number of companies participating in the market and delivering services at various levels.

To obtain a footing in the market, corporations are following the trends of consolidation and growth. For example, in 2018, DB Schenker constructed three new contract logistics facilities in the United States to serve both existing and new customers, as well as relocated one existing location to a significantly bigger facility. By 2020, the company plans to construct another six or seven contract logistics facilities.Europe hold the second largest contract logistics market in 2023. The contract logistics industry is expected to develop rapidly due to increased demand for more integrated services, data management, and a desire for flexible solutions. Contract logistics is becoming the right choice for organizations as the need for particular procedures along the value chain and complete services grows.

Western Europe dominates the market, accounting for more than three-quarters of the market, with Germany accounting for the lion's share. However, countries in Central and Eastern Europe are likely to grow rapidly in the future. In general, the retail sector is an important end-user segment of the contract logistics market. Europe, as a worldwide center for the automobile sector, contributes for a sizable part of the European contract logistics market.
Contract Logistics Market Scope: Inquiry Before Buying



Contract Logistics Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 281.19 Bn.


Forecast Period 2024 to 2030 CAGR:
7.6%
Market Size in 2030:
US $ 470.75 Bn.


 Segments Covered:
by Service
Transportation
Warehousing
Distribution
Aftermarket Logistics


by Type
Insourcing
Outsourcing


by Industry Vertical
Retail
E-Commerce
Manufacturing
Others



Contract Logistics Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria and Rest of Europe)
Asia Pacific (China, South Korea, Japan, India, Australia, Indonesia, Malaysia, Vietnam, Taiwan, Bangladesh, Pakistan and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina Rest of South America)
Contract Logistics Market, Key Players are
1. Agility
2. CEVA
3. DB Schenker
4. DHL Supply Chain
5. DSV
6. Kuehne + Nagel
7. Ryder System
8. SNCF Logistics/GEODIS
9. UPS Supply Chain,
10. Yusen Logistics
11. GEODIS
12. Hitachi Transport System
13. Penske
14. Neovia Logistics Services
15. Ryder System, Inc.
16. XPO Logistics, Inc.

Frequently Asked Questions:

1] What segments are covered in the Global Contract Logistics Market report?
Ans. The segments covered in the Contract Logistics Market report are based on Product Type and End User.

2] Which region is expected to hold the highest share in the Global Contract Logistics Market?
Ans. The North America region is expected to hold the highest share in the Contract Logistics Market.

3] What is the market size of the Global Contract Logistics Market by 2030?
Ans. The market size of the Contract Logistics Market by 2030 is expected to reach US$ 470.75 Bn.

4] What is the forecast period for the Global Contract Logistics Market?
Ans. The forecast period for the Contract Logistics Market is 2024-2030.

5] What was the market size of the Global Contract Logistics Market in 2023?
Ans. The market size of the Contract Logistics Market in 2023 was valued at US$ 281.19 Bn.