New Transport Intelligence report finds that Asia’s outsourcing needs accelerated contract logistics
According to “Global Logistics 2017,” a recent report released by the London think-tank Transport Intelligence (Ti), the overall contract logistics market is estimated to have grown by 3.9% in real terms in 2016.
Logistics in the NewsUPS, Teamsters reach ‘handshake agreement’ on new five-year labor deal IANA data points to solid intermodal volume growth Truck orders are up but it may not all be for capacity expansion Convey announces $10M in new round of venture capital funding FedEx posts strong fiscal Q4 and full-year earnings results More Logistics News
Logistics ResourceMaking The Case: Gaining Visibility into Your Workforce There's a national labor crisis in full effect, and it’s getting harder and harder for companies to ignore. Today’s organizations face unprecedented workforce management challenges.
According to “a recent report released by the London think-tank Transport Intelligence (Ti), the overall contract logistics market is estimated to have grown by 3.9% in real terms in 2016.
Despite stronger global growth during this period, many developed markets struggled to match even the modest growth rates seen in their contract logistics markets in 2015. This reflects trends in the global economy, where growth rates in advanced economies slowed overall.
According to Ti analysts, it would be “too easy” to match these struggles to the impacts of political events such as the U.S. presidential election and the Brexit vote. In 2016, Barack Obama was still U.S. president and the European Union had 28 members. Instead, weak real wage, productivity and consumption growth dampened global economic growth.
“Manufacturing production and retail sales volume growth remain fundamental drivers of contract logistics,” says Ti Economist,. “Manufacturing expansion in advanced economies remains weak while Asia Pacific, including China, is seeing the lion’s share of growth.”
According to Buckby, retail is a different story. “To an extent, e-commerce has bailed out contract logistics in advanced economies,” he said. “And I expect these trends to continue to shape the background of the contract logistics sector for the next few years at least.”
Despite stronger global growth in 2016, many developed markets struggled to match even the modest growth rates seen in their contract logistics markets in 2015. This reflects trends in the global economy, where growth rates in advanced economies slowed overall.
Meanwhile, multinational manufacturers increasingly consider options outside China (especially nearby ASEAN) as production locations, primarily thanks to cheaper labor costs, all the while ingraining Factory Asia more deeply, a spur for the region’s manufacturing contract logistics.
That being said, even with rising wages, manufacturing in China is still undeniably strong, add Ti analysts. As low cost manufacturing has departed, this has been offset by China moving up the chain to more value-added production.
“While Europe and North America suffer from both stagnating retail sales and manufacturing production growth, Asia is taking advantage, driving growth for the global market as a whole,” adds Buckby.
About the AuthorPatrick Burnson, Executive Editor Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
The Path Forward for ERP WMS Cross-border trade: Preparation and experience pay off View More From this Issue