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The frac sand logistics market size is estimated to grow at a CAGR of 4.3% between 2023 and 2028. The market size is forecast to increase by USD 1.05 billion. The growth of the market depends on several factors such as the presence of diverse delivery modes, technological advancements in frac sand mining and growing last-mile delivery services. Our report examines historical data from 2018 - 2022, besides analyzing the current market scenario.
The research report on the frac sand logistics market offers industry forecasts and segmentation based on application including sourcing and mining, transportation, storage and handling, and others. It also segments the market by type, which comprises 3PL, 4PL, and trucking and others. Geographically, the report covers North America, Europe, APAC, South America, and the Middle East and Africa. The market size, historical data (2018-2022), and future forecasts are presented in terms of value USD 1.16 billion for all these mentioned segments.
Frac Sand Logistics Market Forecast 2024-2028
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Our researchers studied the data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.
Diverse delivery modes allow logistics providers to meet the specific needs and preferences of oil and gas producers. Customers may have different requirements for transportation, and having various delivery options ensures that these needs can be accommodated. Different delivery modes can be strategically used to optimize transportation routes and reduce costs. Depending on the environmental and sustainability goals of oil and gas companies, logistics providers can choose delivery modes that align with these objectives.
For instance, rail transport may be preferred for its potentially lower environmental impact compared with trucking. Some delivery modes are better suited for last-mile delivery to remote drilling sites or challenging terrains. The ability to navigate these challenges using the appropriate mode is essential for on-time deliveries. Thus, the presence of diverse delivery modes will boost the growth of the global frac sand logistics market during the forecast period.
Shale basins are rich sources of oil and natural gas, and hydraulic fracturing (fracking) activities are prevalent in these areas. As a result, the proximity of frac sand mines, processing facilities, and logistics centres to these shale basins plays a vital role in the efficiency and cost-effectiveness of frac sand logistics. Being close to shale basins reduces transportation costs significantly. Frac sand does not need to be transported over long distances, leading to cost savings in terms of fuel, labour, and maintenance expenses. The proximity of mining, processing, and logistics facilities to shale basins helps optimize the entire supply chain. Companies can better coordinate their operations and resources to meet the demands of oil and gas producers.
Moreover, logistics providers can establish storage and inventory management facilities near shale basins, ensuring a readily available supply of frac sand for immediate use. This reduces the risk of shortages. Infrastructure development and support services tend to be more readily available near shale basins, facilitating logistics operations. These areas often have established transportation networks, making it easier to move frac sand. Thus, proximity to shale basins will propel the growth of the global frac sand logistics market during the forecast period.
High equipment costs, including the purchase, maintenance, and fuel expenses for trucks, railcars, and transportation vehicles, can increase the overall cost of transporting frac sand. These costs are often passed on to customers, negatively affecting the competitiveness of logistics providers. Labour costs for drivers, equipment operators, and other personnel involved in frac sand logistics can be a substantial portion of the operational expenses. High labour costs may lead to the need for increased service fees or charges. Equipment used for frac sand logistics, such as trucks and conveyor systems, require regular maintenance and occasional repairs. The costs associated with maintenance and repairs can negatively impact the profitability of logistics companies.
In addition to that, labour shortages in the transportation and logistics industry can drive up labour costs. Recruitment, training, and retaining qualified personnel become challenging and costly. Ensuring regulatory compliance may require additional training and certification for personnel, increasing labour costs. Compliance with safety and environmental regulations is critical. Thus, high equipment and labour costs for transporting frac sand will impede the growth of the global frac sand logistics market during the forecast period.
The sourcing and mining segment is estimated to witness significant growth during the forecast period. Sourcing frac sand involves the process of identifying, evaluating, and securing a consistent supply of high-quality sand specifically used in hydraulic fracturing (fracking) operations in the oil and gas industry. The process begins with a geological assessment to identify potential sources of frac sand. Geological surveys, core sampling, drilling, and laboratory testing are used to evaluate the quality and quantity of sand deposits.
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The sourcing and mining segment was the largest and was valued at USD 1.61 billion in 2018. Quality assessment is crucial to ensure that the sourced sand meets the specific requirements for hydraulic fracturing. Key quality factors include grain size, roundness, sphericity, crush resistance, and the absence of impurities such as clay, silt, and organic matter. The first step in frac sand mining involves identifying suitable sand deposits. This process often includes geological surveys, core sampling, drilling, and laboratory testing to evaluate the quality and quantity of sand reserves. Quality assessment is crucial to ensure that the mined sand meets the specific requirements for hydraulic fracturing. Important quality factors include grain size, roundness, sphericity, crush resistance, and the absence of impurities such as clay, silt, and organic matter. Thus, these factors will contribute to the growth of the sourcing and mining segment, which will drive the growth of the global frac sand logistics market during the forecast period.
Based on type, the market has been segmented into 3PL, 4PL, and trucking and others. The 3PL segment will account for the largest share of this segment.?3PLs can handle the transportation of frac sand from the mining sites to the oil and gas drilling locations. They manage the logistics of coordinating trucks, railroads, or other transport modes to ensure that the sand is delivered to its destination efficiently and on time. 3PL providers can help manage frac sand inventory, ensuring that there is an adequate supply available to meet the demands of drilling operations. 3PLs can help establish and manage a distribution network for frac sand to ensure efficient delivery to multiple drilling sites. This may include optimizing routes, coordinating deliveries, and providing real-time tracking and reporting. 3PLs can manage the last-mile delivery of frac sand, ensuring that it reaches the well sites, even in remote or challenging locations. Thus, the use of 3PL in transportation management, inventory management, warehousing, and storage will drive the growth of the 3PL segment, which will boost the growth of the global frac sand logistics market during the forecast period.
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North America is estimated to contribute 39% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. The frac sand logistics market in North America is expected to grow significantly during the forecast period. The growth of hydraulic fracturing activities, primarily in shale basins, has driven the demand for frac sand. As drilling operations expand, so does the need for efficient logistics to transport and deliver sand to well sites. Frac sand logistics providers strategically locate facilities and distribution centers near major shale reserves, such as the Permian Basin and the Eagle Ford Shale. This proximity reduces transportation costs and ensures a steady supply of frac sand.
In addition, logistics companies offer various delivery options, including trucking, rail transport, and conveyor systems, to meet the specific needs of oil and gas producers. Diversifying delivery modes enhances flexibility. The use of technology for real-time tracking, route optimization, and inventory management enhances the efficiency of frac sand logistics. It also allows for better visibility and control of the supply chain. Thus, these factors will drive the growth of the frac sand logistics market during the forecast period.
In 2020, the outbreak of COVID-19 negatively affected the frac sand logistics market in North America. However, in 2021, the initiation of vaccination drives led to the restoration of the supply chain of frac sand and the reopening of mining sites of frac sand in the region, which stabilized the growth of the frac sand logistics market. As oil prices began to recover and stabilize, drilling activities picked up, leading to increased demand for frac sand logistics. The development of innovative technologies and equipment for sand mining and transportation can increase the efficiency of frac sand logistics. Thus, all these factors will propel the growth of the frac sand logistics market in North America during the forecast period.
Companies 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.
Atlas Energy Solutions - The company offers frac sand logistics services which provides customizable on site storage solutions and delivers comprehensive last mile solutions powered by technology.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Atlas Energy Solutions, Inc., BelCon Logistics, Black Eagle Transport, CIG Logistics, Detmar Logistics LLC., FilaMar Energy Service, ForeSite Logistics, Halliburton Co., OmniTRAX Inc, Permian Frac Sand LLC, Pontotoc Sand and Stone, R L Global Logistics Inc., Sand Revolution, STAAR Logistics, SUJAL LOGISTICS PVT. LTD. , Tidewater Logistics, Twin Eagle, US Silica Holdings Inc., Vista Proppants and Logistics, and Union Pacific Corp.
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The frac sand logistics market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
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Frac Sand Logistics Market Scope |
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Report Coverage |
Details |
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Page number |
153 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 4.3% |
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Market Growth 2024-2028 |
USD 1.05 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
3.4 |
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Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
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Performing market contribution |
North America at 39% |
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Key countries |
US, Canada, China, Japan, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Atlas Energy Solutions, Inc., BelCon Logistics, Black Eagle Transport, CIG Logistics, Detmar Logistics LLC., FilaMar Energy Service, ForeSite Logistics, Halliburton Co., OmniTRAX Inc, Permian Frac Sand LLC, Pontotoc Sand and Stone, R L Global Logistics Inc., Sand Revolution, STAAR Logistics, SUJAL LOGISTICS PVT. LTD. , Tidewater Logistics, Twin Eagle, US Silica Holdings Inc., Vista Proppants and Logistics, and Union Pacific Corp. |
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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 the forecast period |
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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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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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