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The global road logistics market size is estimated to grow by USD 782.97 billion between 2022 and 2027 exhibiting a CAGR of 3.59%.
Planning, execution, and control of the procurement, movement, and stationing of materials, personnel, and other resources are the main focus of road logistics. Factors such as rising global warming have compelled vendors operating in the global road logistics market to adopt green logistics solutions to reduce carbon emissions. Green logistics includes the implementation of sustainable operations to reduce environmental pollution. Furthermore, factors such as increasing demand from the medical and healthcare industry in the US, and increased outsourcing of logistics services are driving the market growth.
This report extensively covers market segmentation by Application (domestic and international), Type (truckload, less than truckload, parcel, and same day), and Geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The market in the region was negatively impacted by the COVID-19 outbreak in 2020. However, the large-scale vaccination drives and the recovery and reopening of international boundaries for trading generated demand for road logistics globally. The containment of the pandemic also helped resume manufacturing activities, which increased the production and sales of industrial and non-industrial products in the region hence driving the recovery in 2021. Further, the gradual recovery of economies in 2021 from the COVID-19 crisis and the adoption of e-commerce models by various end-user industries, including the automotive industry, and the regional logistics market implicated the rebound of the regional market in 2021.
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market growth is being driven by the growing trend of outsourcing logistics services. To avoid the significant cost and time investment required to build a logistics infrastructure, many companies are opting to outsource these services. By doing so, they can reduce operational expenses and maintain cash flows, while also achieving significant savings by avoiding expenses related to warehousing, machinery, and vehicles. Third-party logistics providers offer customized services to meet the specific supply chain management needs of shippers, allowing them to partially outsource logistics requirements and focus on their core competencies. This trend is expected to continue during the forecast period, as manufacturing companies expand their operations and seek to increase operational efficiency and cost savings by outsourcing logistics services.
An emerging trend in the same-day delivery market is the adoption of automation. As logistics players offering same-day delivery services face increasing costs associated with fuel, maintenance, and labor, many have been investing in autonomous logistics to maintain profitability in a highly competitive market. This shift towards automation is expected to gradually replace manual interaction with more accurate and efficient outcomes, reducing labor errors and shortening logistics operations by 80-85%. Additionally, the implementation of the Internet of Things (IoT) in logistics and robotics in the warehouse picking operations is expected to further improve efficiency in the same-day delivery market. Overall, these factors are predicted to drive market growth during the forecast period.
The shortage of truck drivers presents a significant challenge that is hindering the market growth. In the global market, lead time is a critical factor, and products must be delivered to various destinations quickly to ensure customer satisfaction. However, the shortage of skilled truck drivers is becoming increasingly severe, and this shortfall is expected to worsen if underlying issues such as low wages, long working hours, and the adoption of electronic logging devices (ELDs) are not addressed.
The implementation of ELDs has led to protests from truckers and logistics companies in the US, who view digital monitoring as an invasion of their privacy. This shortage of truck drivers is expected to reach 50% by 2022, compared to 2018. As a result, manufacturers and distributors must pay higher wages to attract drivers, which drives up road logistics costs. Additionally, the industry-wide shortage of truck drivers can lead to lower vehicle utilization and missed revenue opportunities. Overall, the lack of skilled drivers will significantly limit market growth during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Road Logistics Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Acme Truck Line Inc. - The company offers transportation of equipment, materials, truckload consolidation, trucking logistics partnership programs, and split billing services. The key offerings of the company include road logistics.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The domestic segment was valued at USD 2,731.92 billion in 2017 and continued to grow until 2021. Domestic deliveries are more affordable than foreign deliveries, which has fueled the expansion of the domestic segment of the global market. Local players with a large number of fleets and offer competitive prices dominate the domestic market. Additionally, major players in APAC, such as Mahindra and All Cargo, are also transitioning to an asset-light business model, subcontracting with regional transport suppliers, and offering value-added services such as kitting, assembly, packing, and other crucial aspects of the market. Owing to these factors, the domestic application segment is expected to witness a growth rate of 2.47% in 2023 and 3.89% in 2024. These factors are expected to drive market growth during the forecast period.
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A truckload is a mode of freight, which is mainly used for larger shipments that typically occupy more than half and up to the full capacity of a 48-foot or 53-foot trailer. This mode is commonly used when shippers decide they have enough items to fill a truck, want all their shipments in one trailer when the freight is time-sensitive, or if the shipper decide that it is more cost-effective than the other options available. The transportation mode also includes refrigerated trucks that are used for the transportation of temperature-sensitive products. Apart from providing logistics services, road freight service providers also provide value-added services, such as loading and unloading, documentation, door-to-door delivery, and packaging. The growing global manufacturing industry is expected to drive the growth of this market segment during the forecast period. Vendors in the market are adopting intermodal transportation to provide better services to their clients. The full truckload segment is highly fragmented, with the largest carriers accounting for less than 1% of the market.
APAC is estimated to contribute 45% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The demand for road logistics is expected to increase in developing economies such as China, India, and Indonesia during the forecast period, with growth fundamentals to remain relatively strong. Rapid economic growth in APAC drastically increased per capita income over the past few of years, which led to a rise in the purchasing power of consumers and, therefore, higher sales in the e-commerce industry. This will positively influence the market. The high growth of LTL carriers in APAC is also attributed to an increase in imports and exports due to a rise in industrialization that requires manufacturers to move their raw materials and finished goods worldwide. Furthermore, the large automobile manufacturing industry in Japan and India offers market potential for LTL carriers. Such factors will boost market growth during the forecast period.
Additionally, government initiatives focusing on trade and foreign direct investment (FDI) are strengthening the cross-border e-commerce logistics market in APAC. For instance, the Government of China initiated the One Belt One Road (OBOR) initiative for infrastructural development in 2017. The primary objectives of this initiative were to enhance connectivity; improve trade; and upgrade logistics, transportation, and communication infrastructure networks with other neighboring countries. This initiative has augmented the demand for regional as well as international road logistics since its inception in 2017. Therefore, such initiatives will positively impact the market growth during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Road Logistics Market Scope |
|
Report Coverage |
Details |
Page number |
168 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.59% |
Market growth 2023-2027 |
USD 782.97 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
2.53 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 45% |
Key countries |
US, China, Japan, Germany, and France |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Acme Truck Line Inc., Agility Public Warehousing Co. K.S.C.P, ArcBest Corp, Bennett International Group LLC, C H Robinson Worldwide Inc., Deutsche Post AG, FedEx Corp., J.B. Hunt Transport Services Inc., Knight Swift Transportation Holdings Inc., Kuehne Nagel Management AG, Penske Corp., Quantix SCS Inc., RD Logistics, Ryder System Inc, Saltchuk, Schneider National Inc., United Parcel Service Inc., Werner Enterprises Inc., XPO Logistics Inc., and Yellow Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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