The latest report from logistics market research firm Ti Insight shows that the Asia-Pacific region is expected to maintain its lead as the largest contract logistics market over the next decade, with no signs that Europe or North America can rival it in terms of market size.

The report titled "Global Contract Logistics Market Size and Forecast: 2024-2028" predicts that the Asia-Pacific region's market share will rise from 38% in 2023 to 42% by 2025. The region's volume is expected to reach €123.693 billion this year.

Ti Insight indicates that all regions globally experienced positive growth in 2023, and this trend is expected to continue during the forecast period.

By 2028, the global contract logistics market is expected to grow at a compound annual growth rate (CAGR) of 4.2%, reaching €348.881 billion. The Asia-Pacific market is projected to have a CAGR of 6.9%, North America 2.8%, and Europe 1.7%.

Market Analysis for 2024

Due to sluggish retail growth, Ti Insight forecasts a market growth of 3.6% in 2024, valued at €294.265 billion. This contrasts sharply with the previous June 2024 forecast of a 4.2% growth rate.

In the first quarter of 2024, growth in the Americas and Europe fell below expectations, affecting the similarly underperforming Asia-Pacific region.

According to Ti Insight, the anticipated recovery is influenced by factors such as high inflation, economic uncertainty, geopolitical conflicts, and labor shortages.

The report notes that, despite declining inflation, "recovery is not immediate or obvious," and "ongoing geopolitical issues in the Red Sea and Europe have weakened demand."

On the positive side, "contract logistics has proven resilient against political and economic shocks," Ti Insight remarks. The 2023 performance of DHL Supply Chain reflects this global trend.

Overall, market revenue in 2024 is expected to grow by 3.2%, with the Americas growing by 2.5%, Asia-Pacific by 5.1%, and Europe, the Middle East, and Africa by 3.2%.

The continued growth of e-commerce is a major trend for integrators, with Chinese parcel carriers' annual cargo volume increasing by more than 15%. This is driving the growth of the contract logistics market in Asia-Pacific, with integrators like DHL Supply Chain attributing their growth mainly to e-commerce suppliers as clients. E-commerce is experiencing strong growth across nearly every market, from countries like Canada to global engines such as the United States and China.

The growth of the service sector is driving GDP growth, while the retail sector remains sluggish, impacting contract logistics.

Emerging economies in Asia are driving growth, with Ti forecasting a 7.1% year-on-year increase in 2024, following a 7.2% growth this year. Growth in North America may be slower, projected to rise to 1.7% in 2024 and 3.2% in 2025. Meanwhile, Europe may dampen global economic growth, with a projected growth of 0.7% in 2024 and 1.8% in 2025.

Ti Insight cites the International Monetary Fund's (IMF) forecast, noting that global GDP growth will stabilize in 2025 but with modest performance.

In 2024, GDP growth will primarily be driven by East Asia, while Europe's growth is expected to fall below initial predictions. North America's growth, led by the U.S., is expected to slightly exceed the original forecast.

The IMF states that its GDP growth forecast of 3.1% is "moderate" compared to pre-pandemic averages.