Apex Insight’s latest report, Global Logistics Market Insight Report 2016, estimates the global outsourced logistics market at US$760bn in 2015, having grown 5% over the last year. The logistics market is large, fragmented and populated by a wide range of differing companies.
There are multinational companies offering a comprehensive range of logistics services leading the industry, down to smaller national players, offering simple logistics services. The market has been driven by consolidation over the last 20 years or so, with customers seeking fewer, larger providers that are able to manage complex supply chains on a global basis. Apex Insight estimates that the global outsourced logistics market was valued at over US$760bn in 2015, having grown by almost 5% in 2015.
Market growth has been driven by both increased economic activity and the continued trend in outsourcing of logistics activities to third-parties, both new outsourcers and companies outsourcing more activities to third-parties. The largest region in terms of outsourced logistics market size is Asia Pacific, followed by Europe and North America, with the Asia Pacific region having experienced faster growth in logistics market value than other regions. Outsourcing penetration is highest in Europe, but levels are increasing quickly in Asia Pacific.
The leading logistics providers covered in this report generated combined 2014 logistics revenues of US$285bn, demonstrating that the global outsourced logistics industry remains fragmented and open to further consolidation. The largest logistics providers are characterised by differing service lines, asset ownership models, geographical scope and types of customers they serve.
The top three groups are all based in Europe: DPDHL is the largest provider globally, followed by Kuehne + Nagel and DB Schenker Logistics. All three have grown slower than the market in recent years as they have consolidated the major acquisitions made in the past. XPO Logistics has recently joined the top six as a result of its recent large acquisitions (Norbert Dentressangle and Con-way). The revenue growth rates (CAGR 2010-2014) of the leading logistics providers ranges from -4.6% (Wincanton) to 26.9% (Yusen Logistics). Margins achieved ranged from -9.3% to 10.3% in 2014. Average margin in 2014 stood at 4.3%, having been relatively stable over the last four years. There has been significant merger and acquisition activity in the global logistics industry.
XPO Logistics has been at the forefront of acquisition activity in recent years, acquiring a number of logistics companies in various regions, including Norbert Dentressangle, Con-way and New Breed Logistics. Other notable acquisitions include:
- DSV’s proposed acquisition of UTi Worldwide
- Geodis’ acquisition of Ozburn-Hessey Logistics
- Kintetsu World Express’ acquisition of APL Logistics
- Japan Post’s acquisition of Toll Group
- CH Robinson’s acquisition of Freightquote
- Goldman Sachs / Rhone Capital’s acquisition of Neovia Logistics
In the future, economic performance will continue to be a key driver of the market. Market growth will also be driven by the continued outsourcing of supply chain activity to third-party logistics providers. The includes the increase in the scope of contracts when they are renewed. However, a key factor which will offset the impact of this on market growth is the efficiency savings made by logistics providers which are passed back to clients. Further consolidation is expected as logistics providers seek to add new service capabilities and geographical scope to enable them to support global clients. For more information about the report, please visit the report page: Global Logistics Market Insight Report 2016. The report is available to purchase and download online via Standard and Extended Licences, depending on usage.