July 20, 2020
According to the research report titled ‘Global Contract Logistics Market Size study with COVID-19 impact, by Type (Outsourcing, Insourcing), by Service (Transportation, Warehousing, Packaging Processes and Solutions, Production Logistics, Aftermarket Logistics, Others), by End-User (Aerospace, Automotive, High-Tech, Pharma & Healthcare, Retail, Others) and Regional Forecasts 2020-2026’, available with Market Study Report LLC, global contract logistics market was worth USD 213 billion in 2019 and is expected to expand with a CAGR of 4.8% through 2026.
Shifting focus of manufactures towards more flexible solutions, burgeoning demand for service integration & data management, and growing e-commerce sector across the globe are the key factors that are likely to influence the global contract logistics market size over the analysis period.
For those unfamiliar, the set of comprehensive procedures starting from production point of product to distribution at final sale point is termed as contract logistics. It combines supply chain management processes with conventional logistics. It includes outsourcing of resource management tasks to a third-party vendor. Various activities ranging from distributing & transporting goods, designing facilities for handling inventory, planning supply chains, as well as providing specific aspects of customer service are included in contract logistics. Cost saving, in the form of equity or time, is the most important benefit of contract logistics, as it eliminates the need to set up an expensive infrastructure.
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According to Shopify, a multinational e-commerce firm based in Canada, e-commerce sales were valued at USD 2.3 trillion in 2017 and the valuation is projected to reach USD 4.5 trillion by 2021. Consumer preference for online shopping is boosting the demand for contract logistics, thereby contributing to the market growth.
On the contrary, due to COVID-19 outbreak, industries are witnessing a reduction in the production and distribution of goods & services owing to manufacturing shutdowns in China and unanticipated recession in Europe and North America. Excessive delayed orders, port calls and blank sailings have amplified disruption in supply chain, hence hampering the demand for contract logistics. Additionally, lack of skilled vendors and unavailability of direct oversight are poised to have a negative impact on the industry outlook over the study period.
From a regional point of view, global contract logistics market is fragmented into Latin America, Europe, North America, Asia Pacific, and Rest of the World. Asia Pacific holds a significant share of global contract logistics market currently, pertaining to growing e-commerce sector and surging demand for service integration in countries like India and China. Meanwhile, Middle East & Africa market is slated to grow substantially over the anticipated timeline, owing to technological developments in logistics sector, especially in UAE and Saudi Arabia.
Major players in global contract logistics market are Ryder System Inc., UPS Supply Chain Solutions, Neovia Logistics Services, LLC, Geodis, Hitachi Transport System, Ltd., DB Schenker (Deutsche Bahn AG), Ceva Logistics AG, Kuehne + Nagel International AG, XPO Logistics, Inc., and Deutsche Post AG among others.