Global Contract Logistics Market Growing

The 5% growth rate experienced by the global contract logistics market in 2008 represents a significant weakening of the market says a report by Transport Intelligence. The market had experienced growth rates around 10% for several years.

Most of the growth occurred in the first three quarters of the year, said the report, adding to concerns. The downturn was felt into 2009, it continues, though there were signs it had bottomed out by the end of the first quarter of 2009.

Asia Pacific, Central and Eastern Europe and Latin America experienced the highest growth rates.

“In such volatile times, forecasting the next five years is highly problematic,” said Transport Intelligence. The group believes that the market will grow at a compound annual growth rate (CAGR) of 2.4% between 2008 and 2012.

"Contract logistics companies have a higher degree of protection from market volatility due to the agreements and relationships they have in place with their clients,” said John Manners-Bell, CEO of Transport Intelligence. “However with a melt down in sales, manufacturers and retailers will be looking to reduce their supply chain costs and contract logistics companies will increasingly find their margins squeezed at the same time as their underlying revenues weaken. Logistics providers will have to work hard at increasing their value proposition to clients if they are to avoid the worst excesses of the recession."