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The contract logistics industry is expected to expand from $544.98 billion in 2033 to $282.27 billion in 2023. Between 2023 and 2033, the demand for contract logistics is predicted to expand at a 6.8% CAGR due to many factors.

The contract logistics industry is being driven primarily by government efforts to encourage economic diversification, which have resulted in infrastructure development, digitization, and industrialization, as well as rising foreign direct investment and the explosive expansion of the e-commerce sector.

The growing need for cost-efficient and technology-integrated supply chains, as well as the focus on core competencies in the manufacturing sector, are all contributing to the rise of the contract logistics business. The integration of artificial intelligence, IoT, and novel technologies in the sector is expected to boost market growth and reduce logistical costs.

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The use of cloud-integrated logistics management software is also increasing owing to its capacity to provide real-time tracking and inventory updates, precise monitoring of product life cycles, and real-time accuracy. Furthermore, cloud-based logistics software is scalable to suit the needs of contract logistics industry participants and has the ability to redirect missing consignments.

Over the past two decades, inventive logistic robotic companies have worked hard to incorporate AI and machine learning, better sensors and reaction times, warehouse management software, and logistics management software. The supply chain has recently seen an increase in warehouse automation. Huge amounts of money and investment have been given to the sector. While Google invested $500 million in JD’s automated logistics, Alibaba invested $15 billion in robotic logistics infrastructure. The demand for warehouse robotics in the supply chain is anticipated to reach $22.4 billion by the end of 2021.

Key Takeaways from the Contract Logistics Market:

• With a projected value of US$ 832.5 billion through 2033, the United States is expected to hold a 20.5% share of the North America contract logistics industry in 2022.
• Germany is likely to account for 4.1% of the global contract logistics industry in 2022. In 2022, the German contract logistics industry is expected to be worth US$ 142.9 billion.
• The contract logistics industry in Japan is expected to be worth US$ 325 billion in 2022 and to grow at a strong CAGR of 7.56% during the forecast period.
• Outsourcing is expected to dominate the market throughout the forecast period, accounting for more than 60% of revenue share in 2022.
• Distribution management also provides a competitive advantage over other contract logistics services, allowing it to capture more than 59.5% of the market in 2022.
• During the forecast period, retail and e-commerce are expected to dominate the market, with a combined market share of around 70%.

Who is Winning?

The contract logistics industry is a constantly changing sector of the logistics industry, with increased competition and a diverse range of product innovations propelling the market forward. Contract logistics providers are constantly innovating and introducing new solutions, products, and services to meet the demands of their customers. Automation, the Internet of Things (IoT), and big data analytics are among the industry’s most important trends, allowing providers to increase efficiency, lower costs, and provide more value to customers. Key players are frequently focused on providing end-to-end solutions, whereas the smaller players are usually focused on specific services, such as warehousing or transportation.

Recent Developments in the Market:

• Penske and Röhlig Logistics established a brand-new joint venture company, Rohlig Penske Logistics GmbH, in January 2022. The joint venture included 55,000 square meters of additional warehousing, transport management operations, and e-commerce logistics, with plans to expand further across Europe.
• The e-commerce behemoth Mercado Libre acquired a minority stake in Kangu, a Brazilian logistics startup, in September 2020. This was done to boost e-commerce and allow small retailers to collect and withdraw e-commerce purchases.

Key Players in the Contract Logistics Industry

• SNCF Logistics/GEODIS
• UPS Supply Chain
• Kuehne + Nagel
• Yusen Logistics
• Penske
• XPO Logistics, Inc.
• Hitachi Transport System
• DHL Supply Chain
• DB Schenker

Contract Logistics Market by Category

By Type:

• Insourcing
• Outsourcing

By Service:

• Warehousing
• Transportation
• Aftermarket Logistics
• Distribution
• Others

By Industrial Vertical:

• E-Commerce
• Retail
• Manufacturing
• Others