Report: Global contract logistics industry bucks downturn, for now

Report: Global contract logistics industry bucks downturn, for now The global contract logistics industry was largely immune to the economic downturn hurting other transport and logistics sectors in 2007, but can expect the next few years to be more challenging, according a new report from Transport Intelligence (Ti), a United Kingdom-based analyst.
   Figures published today in Ti's latest report, Global Contract Logistics 2008, show that the worldwide contract logistics industry grew 9 percent to slightly more than 140 billion euros in 2007.
   The biggest growth was seen in the Asia Pacific, which grew in excess of 11 percent, although Ti said that figure hides a high level of variance.
   “China's contract logistics sector continued its extraordinary growth, no doubt aided by the run-up to the Olympic Games. Japan, however, has fallen back into its long-running economic malaise and its contract logistics market returned one of the smallest growth rates from across the region. It was outshone by a range of up-and-coming markets such as Vietnam, Malaysia and Indonesia,” Ti said.
   Europe was helped by strong low double-digit growth in its largest market, the United Kingdom. Growth rates in Germany and France were “solid” as the manufacturing and retailing sectors in both countries held up well. Boom markets in Europe were Finland, benefiting being a gateway to Russia, while all Central and Eastern European countries grew “significantly faster” than their western counterparts on the back of ongoing foreign investment in manufacturing facilities and the trend towards near-sourcing, the analyst said.
   The U.S. market was the only one to slow from the previous year with growth of 7 percent, down from over 10 percent in 2006. A slump in the construction industry, the 'credit crunch' and lower retail sales all contributed to that slower growth, with the sector related to the distribution of import volumes from Asia Pacific particularly affected, Ti said.
   'So far, the contract logistics industry has shrugged off talk of the economic downturn and even in the U.S., where the transport industry is struggling, growth rates are remarkably good,” said John Manners-Bell, Ti’s chief executive officer. “However, we believe that markets around the world will inevitably be affected by the 'credit crunch' and a loss of consumer confidence. Consequently, we are downgrading our forecasts for the industry accordingly.'