The Asia-Pacific contract logistics market will grow by 42% in 2025
The latest report from logistics market research firm Ti Insight shows that the Asia-Pacific region is expected to maintain its leading position as the largest contract logistics market in a decade, with no indication that Europe or North America can rival it in market size.
The Global Contract Logistics Market Size and Forecast: 2024-2028 predicts that the market share of the Asia-Pacific region will increase from 38% in 2023 to 42% in 2025. The region will handle 123.6929 billion euros this year.
According to Ti Insight, all regions of the world saw positive growth in 2023, a trend that will continue over the forecast period.
By 2028, the global contract logistics market is expected to grow at a CAGR of 4.2% to reach €348.881.4 million. The Asia-Pacific market is expected to grow at a CAGR of 6.9%, the North American market at 2.8%, and the European market at 1.7%.
Market analysis in 2024
With the retail downturn impacting growth, Ti Insight expects the market to grow by 3.6% in 2024 (value: €294,264.8 million). This is in sharp contrast to the previous forecast made in June 2024, which called for an annual growth rate of 4.2%.
In the first quarter of 2024, growth in the Americas and Europe was lower than expected, affecting the Asia Pacific region, which also performed poorly.
According to Ti Insight, the expected recovery is affected by high inflation, uncertain economic developments, geopolitical conflicts and labor shortages.
Despite the fall in inflation, "the recovery is not immediate or noticeable," while "ongoing geopolitical issues in the Red Sea and Europe have weakened demand," the report said.
On the bright side, "contract logistics is resilient to political and economic shocks," Ti Insight said. DHL Supply Chain's 2023 performance reflects this global trend.
Overall market revenue for 2024 grew by 3.2% year-over-year, led by 2.5% growth in the Americas, 5.1% growth in Asia Pacific and 3.2% growth in Europe, the Middle East and Africa.
The continued growth of e-commerce is a major trend for integrators, with parcel carriers in China seeing annual freight volume growth of more than 15%. This is helping to drive the contract logistics market in the Asia-Pacific region, with integrators such as DHL Supply Chain attributing their growth mainly to the inclusion of e-commerce suppliers as customers. From countries like Canada to global engines like the United States and China, e-commerce is showing strong growth in almost every market.
Growth in the services sector has led to GDP growth, while retail has been sluggish, which has had an impact on contract logistics.
Emerging economies in Asia are driving growth, with Ti forecasting 7.1% year-on-year growth in 2024 and 7.2% this year. Growth in North America is likely to be even slower, rising to 1.7 percent in 2024 and 3.2 percent in 2025. Europe, meanwhile, is likely to hold back global growth, projected to grow by 0.7% in 2024 and 1.8% in 2025.
Ti Insight cites the International Monetary Fund's forecast that global GDP growth will be stable but flat in 2025.
GDP growth in 2024 is mainly driven by East Asia, while growth in Europe is expected to be lower than initially forecast. North America, led primarily by the United States, is expected to grow slightly faster than initially forecast.
The IMF said its forecast of 3.1 percent GDP growth was "moderate" compared to the pre-pandemic average.
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