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Logistics growth losing steam

logistics growth illustrated with airliner with a globe and autoloader with boxes in a container

Key logistics market growth rates fell in 2018 according to Transport Intelligence’s (Ti) global market size & growth forecast data.

  • The Global Freight Forwarding market grew 3.9% in 2018, a marked decline from an expansion of 8.0% in 2017
  • The Global Contract Logistics market was 4.9% bigger in 2018.
  • At 8.5%, the Global Express & Small Parcels market had the quickest rate of expansion amongst the logistics markets.
  • Slowing volume growth in the European Road Freight Transport market saw the growth rate slow to 2.9% in 2018.

Global Freight Forwarding

In a market heavily reliant on global trading conditions, growth in the global freight forwarding market fell from 8.0% in 2017 to 3.9% in 2018. The slowdown is not altogether surprising given the exceptional performance in 2017 when demand for air transport services surged as shippers rushed to re-stock inventories and move goods to market. As the restocking cycle drew to a close in early 2018, market expansion reduced substantially. Trade tensions between the US and China have had far-reaching implications for regional and global supply chains, which has affected forwarding growth across different countries.

Global Contract Logistics

While global contract logistics growth slowed in 2018, the change was very slight – the market grew by 4.9% in real terms, down from 5.0% in 2017. The US market performed relatively well, whilst China’s market is continuing show remarkable vigour. Manufacturing has previously been (and continues to be) a strong base for China’s contract logistics growth, but a growing consumer market led by internal investment, growing wages and a boom in e-commerce has created a vibrant opportunity in Chinese retail contract logistics.

Global Express & Small Parcels

An 8.5% expansion saw the global express & small parcels market grow rapidly in 2018, although the growth rate is a slowdown on the 9.7% seen in 2017. e-commerce is continuing to drive rapid growth in China’s express and parcels market, which is expanding much faster than the global growth rate. Although there are significant bright spots in areas such as healthcare and cross-border e-commerce, weaker macroeconomic conditions have played their part in slowing market growth, affecting major players, including FedEx.

European Road Freight Transport

Europe’s road freight market expanded 2.9% in 2018. Macroeconomic performance has been relatively limp compared against the rest of the world. The region’s major markets are facing significant headwinds – Germany sits close to recessionary territory as a result of softer external demand and disruption in its automotive sector, Italy is feeling the effects of mounting public debt, while Brexit uncertainty continues to harm investment into the UK economy.
“Ti’s new figures show robust growth across major global logistics markets. Growth rates are not flattering when compared against the previous year, where global GDP growth was the fastest it had been since 2011. Nonetheless, there have been significant opportunities for LSPs to grow top-line figures through the course of the year,” said Andy Ralls, analyst at Ti.
Note: All growth rates mentioned are in real terms (holding prices and exchange rates constant at 2018 levels) unless stated otherwise.

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