Slower growth predicted for the global contract logistics market

Date Added: 22 July 2022

Slower growth predicted for the global contract logistics market

With our comprehensive array of logistics and distribution centres across the UK, we were very interested to read that in its latest research report - Global Contract Logistics 2022, transport consultancy Ti warns that whilst the contract logistics market exceeds pre-pandemic value, growth is set to slow to 7.1%.

That’s still a decent rate of growth and makes us confident that our ongoing investment in warehousing and logistics operations is a wise decision.

We recently acquired a new development site in the English Midlands and are building a 140,000 sq ft multi-user logistics hub, adding to our nationwide warehousing and logistics network, which amounts to over a million square feet, most of which is self-funded and wholly owned.

Whilst the specification of the building has yet to be finalised, it will feature a high bay fully racked area, with a top location level of 17 m and eaves height of 15 m, suitable for VNA forklift operations. We aim to have the new facility open in Spring 2023, so get in touch now if you are looking for contract logistics space in the Midlands and want to influence to specification of our new facility.

Ti’s latest report indicates that in 2021 the global contract logistics market rebounded and exceeded its pre-pandemic levels in all regions, a marked change from 2020.

The report takes an in-depth look at the implications of a transforming retail market for logistics providers, as well as the current warehousing landscape. It outlines the forces which are shaping the future of warehousing, and questions whether multi-storey warehousing could be the answer to historically low vacancy rates.

Report Highlights:

• The global contract logistics market grew by 8.7% year-on-year in 2021. The global market is expected to grow by a further 7.1% y-o-y in 2022 and at a Compound Annual Growth Rate (CAGR) of 4.9% over the five years to 2026.

• Asia Pacific remains the largest contract logistics market by region, with China poised to overtake the USA market value by 2026.

• The implications for the logistics sector supplying retailers with logistics services will be transformative. The reality of retail logistics will no longer be that of ‘trucks & sheds’, but rather a very reengineered environment that empathises speed, precision, and responsiveness.

• Demand for warehousing is increasing, with low vacancy rates across the globe. The development of the global warehousing industry is also being influenced by three major categories of change drivers: supply chain trends, innovation, and customer needs.

Ti says that expansion of the global contract logistics market was driven largely by pent-up demand and savings growth in the face of restrictions on activity, as well as global trade and recovering manufacturing.

The e-commerce vertical was also a big growth driver during 2021, as the COVID-19 pandemic accelerated digital transformation and global internet penetration.

As the growth drivers gradually abate and the economy weakens, global trade growth is expected to moderate in 2022. As a result, the global contract logistics market is expected to grow at a slower pace.

For more information about our warehousing and logistics services, contact logistics@daviesturner.co.uk or visit https://www.daviesturner.com/logistics

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