THE global contract logistics market contracted 3
THE global contract logistics market contracted 3.3 per cent in 2020, but is expected to become 2.9 per cent larger at the end of 2021 compared to pre-Covid levels, a UK Transport Intelligence (Ti) study has determined. Momentum has returned to the market in 2021, and Ti forecasts 6.5 per cent growth this year.
'Rapid technological change and demand for more sophisticated and responsive services will drive growth, alongside recoveries in manufacturing and consumer confidence,' Ti said.
By 2025, Ti forecasts a global contract logistics market 24 per cent larger than before the Covid crsis.
'Shifting demands and the need for greater sophistication are likely to drive renewed M&A activity in the market in the years ahead,' it said.
Momentum towards the end of the year prevented further declines as the Covid crisis receded in major markets across Asia Pacific, Europe and North America, said Ti.
'A pickup in manufacturing and production compared to early pandemic lockdown measures and a stronger levels of consumer spending bode well for the year ahead, but the potential for spending to re-orientate away from goods expenditure and towards the services sector weakens prospects slightly,' said Ti.
The global contract logistics market is projected to grow at 5.1 per cent, and the market will be 24 per cent larger when compared with 2019, it said
'The consequences of the Covid-19 shock to the global economy are difficult to predict. The US-China tensions are set to disrupt established supply chains in those regions,' said Ti analyst Andy Ralls.
'Meanwhile, Europe is still grappling with an effective rollout of its vaccine programme, which curbs a rapid recovery, though comprehensive recovery funds will likely provide a lifeline to several economies,' he said.
Global Contract Logistics 2021 also takes a look at the market's ongoing evolution. The report analyses the effects of M&A on its development and argues that the largest contract logistics players will look very different from today as investment activity and strategic imperatives drive investment activity on a global basis.
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