AMZN: A TOP PICK KNIN: GOING WITH THE FLOWDSV: RISINGMAERSK: SOARINGMAERSK: HOLDING MSS DISPOSALWMT: FOCUS ON COREUPS: STAFF CUTSGM: TOP SALESGXO: LEGAL RISKAMZN: AI-DRIVEN VALUETSLA: UP SHE GOESUPS: LOOKING FORWARDUPS: LOWERING EPS ESTIMATESEXPD: UNDER PRESSURE CHRW: JOB CUTS REPORTEDWTC: ANOTHER DEAL
AMZN: A TOP PICK KNIN: GOING WITH THE FLOWDSV: RISINGMAERSK: SOARINGMAERSK: HOLDING MSS DISPOSALWMT: FOCUS ON COREUPS: STAFF CUTSGM: TOP SALESGXO: LEGAL RISKAMZN: AI-DRIVEN VALUETSLA: UP SHE GOESUPS: LOOKING FORWARDUPS: LOWERING EPS ESTIMATESEXPD: UNDER PRESSURE CHRW: JOB CUTS REPORTEDWTC: ANOTHER DEAL
The global contract logistics market reported positive trends last year, and is expected to continue this upward trajectory, according to Transport Intelligence (Ti) – but challenging external conditions could pose a threat to growth.
A recent Ti report found the global contract logistics market grew by 3.5% in real terms in 2023, up from 2022’s 3% growth, which Ti said signalled a return to “a more normalised, pre-pandemic state of demand growth”.
Real-term growth shows underlying demand and activity, stripping out inflation. The market recorded a value of €284bn ($308.9bn) in 2023, this was almost 12% above its pre-pandemic value.
And the intelligence platform predicted that the contract logistics market would grow by 4.2% y-o-y in 2024 to reach a value of €296bn. And by 2028, Ti forecasts, it will reach €348bn, and cites ecommerce as “a long-term growth opportunity”.
Indeed, according to DHL, structural e-commerce trends are offsetting weaker consumer spending.
And GXO chief automation officer Adrian Stoch told The Loadstar ecommerce growth was changing customers’ warehousing and logistics requirements.
“In the retail apparel space, for example, companies will need to be very strategic about how they design their warehouse network; you must be as close to your end consumer as possible… same-day fulfilment is a big part of our online buying decision these days.
“And the management of separating out what’s in a single case to go to different stores is a very different type of process than fulfiling to an end customer,” he explained.
In its global contract logistics market sizing report, Ti warned of the risks that could pose a threat to predicted growth. It said: “External factors such as high inflation, uncertain economic developments, geopolitical conflicts and labour shortages all contributed to increased complexity for businesses and adversely impacted demand.”
However, it noted that contract logistics operations and the multi-year contract business model are increasingly proving to be resilient.
“Providers have largely mitigated inflationary issues by operating open or hybrid contracts where costs are transparent, and increases can be passed on to clients directly,” it said.
The world’s largest pure-play logistics contract provider, GXO, said that around 45% of its contracts are open book, while around 55% are ‘hybrid-closed book’, meaning they are partly cost plus and partly fixed price, while Wincanton operates around 73.5% of contracts under open book terms.
Ti’s Contract Logistics Procurement Survey 2023-2024 shows that some 51% of shippers have a hybrid contract with their primary contract logistics provider, while 32.7% have an open book contract.
Navin Yadav
The growth of the global contract logistics market is promising, driven by the robust expansion of e-commerce. However, potential threats like high inflation and geopolitical conflicts could disrupt this upward trend. Companies must adapt strategically to maintain resilience amidst these challenges, as highlighted by Ti’s report.
Thanks,
Piyovi Shipping Software Solutions
Global warehouse demand is expected to pick up at the end of the year, according …
Automotive intelligence company Jato has identified a lucrative alternative market for Chinese electric vehicle (EV) …
2024 is the year organisations will begin deriving business value from AI, according to consultancy …
An “inevitable inflection point” is approaching for companies to embrace digital transformation, but there are …
The owner of Royal Mail has agreed to a £3.57bn ($4.55bn) takeover by Czech billionaire …
Both spot and contract rates in the European road freight market have fallen as the …
On the consolidation trail
UBS analysts yesterday released a GXO note to investors in the wake of Q1 numbers. Stock …
The road haulage sector is still facing rising operational costs, and transport companies have “little choice” …
Maersk pulls out of DB Schenker bid after identifying ‘challenges’ in integration
Forwarders ‘being squeezed’ as spot and contract rates move further apart
Return to double-digit spot rate gains looms with new FAK hikes and surcharges
Container futures trading trend suggests no end to Red Sea crisis this year
Shipper fears resurface as Canadian rail workers renew vote for strike
Red Sea crisis dictates container fleet capacity trends
Freighter aircraft: ‘we are on the cusp of major change in large widebodies’
Airlines add transpac capacity as flood of ecommerce traffic continues
MSC to launch Europe-Asia-North America service
Kuehne + Nagel restructure – ‘Paul was the one with the guts to do it’
Indian importers turning to bulkers as box line capacity falters
Former Flexport/Amazon execs launch tech start-up for forwarders
Schenker race…Mærsk out – in the name of synergies, or the lack thereof
Liner schedule reliability improving, but late ships are arriving even later
News in Brief Podcast | Week 27 2024 | A bustling ocean freight market, acquisition and bankruptcy
Oman Air appoints Mike Duggan as new head of cargo
Alex Lennane
email: [email protected]
Alessandro Pasetti
email: [email protected]
Nick Marsh
email: [email protected]
Arabella Tancred
email: [email protected]
Arabella Tancred
email: [email protected]
OR
