Asia/Middle East driving global contract logistics growth

   The U.K. consulting and research firm Transport Intelligence (Ti) said the global contract logistics market grew 3.4 percent by value in 2012, but warned that growth hides “increasing divergence in the performance of regional markets.”
   Ti’s latest report Global Contract Logistics 2013, found growth in emerging markets is much higher than those in Europe or North America. The Middle East market grew at 5.7 percent, while the Asian contract logistics market grew at 6 percent, largely due to intra-Asian trade growth. Meanwhile, the North America market grew 3 percent, and and Western Europe’s contract logistics sector grew less than 1 percent.
   “This gap in performance is set to widen with the outlook for emerging markets through 2016 remaining strong,” Ti said. “Europe’s 37 percent share of the market is likely to fall to just 31 percent in 2016, whilst Asia’s share will increase by 5 percentage points to 36 percent over the same time scale.”
   According to the report’s lead author, Ti Senior Analyst Cathy Roberson, the changing market dynamics will require a new mindset from contract logistics providers, with the need to focus their strategy on these emerging markets.
   “In the aftermath of the 2008 global recession, the contract logistics market must evolve once more,” she said. “Whilst nobody can doubt China’s enormous potential, a second tier of economies is developing, as manufacturers look to produce and source goods from a range of low cost markets. Trade lanes are shifting away from the U.S. and Europe in favor of emerging markets such as Brazil, Russia, South Africa and the Middle East. Logistics providers must develop their service offerings and expand into these new geographic markets.” – Eric Johnson