Data from Transport Intelligence (Ti) shows that the global logistics industry was worth EUR5.275 trillion (USD6.395 trillion) in 2020. Those with expertise in last mile delivery services were able to benefit as they catered to the surge in online retail.
From 2020-2024, Ti predicts that the industry will enjoy a healthy recovery from the Covid-19 pandemic with a compound annual growth rate (CAGR) of 4.7 percent over the forecast period. Growth in 2021 is expected to be particularly strong, as most logistics markets recover from the contractions in 2020.
The growth in e-commerce will also likely continue, resulting in expansion in both domestic and international express services. Those industry segments are forecast to enjoy CAGRs of 7.9 percent and 6.8 percent respectively over the same period.
Looking back at 2020, the reduction in both air and sea capacity significantly disrupted global supply chains in the first half of the year. When demand from consumers and manufacturers returned in the latter half, air and sea freight capacity struggled to keep up causing rates to rise, said Ti.
For airfreight, research from WorldACD found that year-on-year global volumes were down 12.6 percent but rates were some 79 percent higher; the dramatic disappearance of bellyhold capacity from passenger aircraft was a major contributing factor, removing nearly half of all airfreight capacity.
In ocean freight, rate volatility has been no less extreme, said Ti. Data from Freightos showed the cost of transporting at TEU from China to the US West Coast in the week of January 22, 2021, was USD4,261 – an increase of 103 percent compared to the USD2,102 during the same week in 2020.
While carrier capacity has returned to the market more steadily than in air, a shortage of container availability and port capacity is creating acute problems in supply chains that are likely to keep rates high through the first half of 2021 at least, explained Ti. Read HLPFI’s report on how the multipurpose sector, in particular, could stand to benefit here.
Ti’s market forecasts for air and sea freight put CAGR expansions at 5.4 percent and 5.0 percent between 2020 and 2024 respectively.