The latest report by Ti Insight provides an in-depth analysis of the global contract logistics market, with a particular focus on the performance of the European region from 2024 to 2028.
According to Ti Insight, the European contract logistics market is projected to grow at a compound annual growth rate (CAGR) of 1.7% during the forecast period, reaching a market size of €85,727 million in 2024 and €87,228.1 million by 2025. Despite the ongoing economic challenges, this growth is driven by a gradual recovery in consumer purchasing power and domestic demand.
The report notes that the first half of 2024 has been characterised by slower-than-expected growth in the Americas and Europe, which has had a cascading effect on the underperforming APAC region. External factors such as high inflation, uncertain economic developments, geopolitical conflicts, and labour shortages have impacted the projected recovery.
Ti Insight’s analysis reveals that the recovery in Europe will vary across different countries. For instance, Germany, with its central location and highly skilled logistics services, remains a key hub for international shippers. The country’s strategic position provides easy access to the EU’s 500 million consumers, making it an attractive destination for international companies looking to invest in the logistics sector.
On the other hand, North America is set to grow more slowly at 1.7% to €74,712 million in 2024 and 3.2% in 2025 to €77,100.2 million.
Europe is expected to hold back global growth with forecasts of 0.7% y-o-y to €85,727 million in 2024 and 1.8% in 2025 to €87,228.1 million. Emerging economies in Asia are driving growth, with forecasts of 7.1% y-o-y growth to €115,387.7 million in 2024 and 7.2% in 2025 to €123,692 million.
The report emphasises that inflation has fallen, driven by lower energy prices and improved supply chain conditions. However, the recovery has not been immediate and palpable, while ongoing geopolitical issues in the Red Sea and Europe have softened demand. Most European countries are expected to fall short of their inflation targets by 2025.
A key trend among integrators has been the continuing growth of e-commerce. Chinese parcel carriers are seeing annual volume growth of 15%+, helping drive the APAC contract logistics market. Integrators such as DHL Supply Chain attribute a significant portion of their growth to taking on e-commerce vendors as clients. E-commerce is showing strong growth in nearly every market, from smaller countries like Canada to global engines like China and the US.
Ti Insight’s analysis highlights the resilience of the contract logistics market to political and economic shocks. Major third-party logistics providers (3PLs) have shown resilience in the face of geopolitical conflicts, such as the Ukraine and Red Sea crises. Some 3PLs have benefited from the growth of online discount retailers such as Shein and Temu, which have shifted significant volumes from China to Europe and the US.
Looking forward to 2028, Ti Insight projects a CAGR of 4.2% to €348,881.4 million. The APAC region is set to grow by a CAGR of 6.9% to €150,485.2 million, with North America growing by 2.8% to €84,269.5 million. Europe will continue to grow at a relatively slow 1.7% to €92,536 million. Asia Pacific is expected to retain its lead as the largest contract logistics market well into the decade, with no sign of Europe or North America competing in terms of market size.