The Market for Contract Logistics in North America is Anticipated to Grow at a CAGR of Approx 1.23% (2022 - 2027) - ResearchAndMarkets.com

DUBLIN--(BUSINESS WIRE)--The "North America Contract Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" report has been added to ResearchAndMarkets.com's offering.

The market for contract logistics in North America is anticipated to grow at a CAGR of approx 1.23% during the forecast period (2022-2027).

The slowdown in international trade, restrictions due to the COVID-19 pandemic, and drop in the output of industries like manufacturing and automotive have led to the sharp decline in the contract logistics market in North America. Recent Relaxation of lockdown in the US and Canada has increased the manufacturing activity leading to a surge in Contract Logistics

Many business organizations prefer not to allocate in-house human resources and divisions to warehousing and transportation. As a result warehousing services are outsourced to logistics players.

There is a sharp rise in recent years in warehouse leasing from logistics players across the region. The increasing service levels, such as e-commerce and same-day delivery, are influencing retailers to further outsource their services.

As the United States reopened after a strict shut down due to the COVID-19 pandemic, the logistics industry is showing signs of recovery, according to the December 2021 Logistics Manager's Index Report. The logistics industry is continuing to recover from January 2021 all-time low overall score of 67.2, with an overall LMI score of 75, While the December 2021 recorded LMI score of 70.1.

In relation to the cross-border movement of people and cargo vehicles between Mexico and the United States, it can be mentioned that the border between Mexico and the United States is one of the busiest in the world.

Cargo trucks represent 7.9% of the total number of motorized vehicles that cross the northern border, with a monthly figure that fluctuates around 550,000 units, where almost 72% travel loaded and the remaining 28% circulate empty.

Key Market Trends

E-Commerce growth in the region is a major driver for the growth of the contract logistics market

Among the three countries in the region, the e-commerce market in Canada is the fastest-growing market while the US market is the largest market growing steadily. The e-commerce user penetration is relatively low in Mexico and the Mexican e-commerce market is expected to witness a healthy growth rate through the forecast period.

In 2021 there were over 27 million eCommerce users in Canada, accounting for 72.5% of the Canadian population and is expected to grow to 77.6% in 2025. Increased online shoppers mean that retail eCommerce sales in Canada continue to climb, both in real terms and as a proportion of total retail.

The United States is the second-largest market for eCommerce in terms of revenue in 2021, placing it ahead of Japan and behind China Revenues for eCommerce continue to increase in the upcoming years. E-Commerce has a share of 13.3% of total U.S. retail online sales.

The majority of e-commerce companies award contracts to logistics service providers to provide warehousing and distribution services. The high-velocity e-commerce business models necessitate the companies to have technological solutions that increase the speed of the fulfillment processes.

With the emergence of e-commerce, start-ups related to on-demand and cloud-based warehousing are gaining popularity. These companies offer flexibility to the companies in terms of using the warehousing space according to the seasonal demand instead of long-term contracts for a fixed space.

Manufacturing & Automotive is expected to witness high growth during the forecast period

Manufacturing companies spend a great deal of time looking for ways to beat their competition in new and innovative ways, whether it is through new manufacturing processes, better products, or improved supply chain management.

Logistics for the manufacturing industry comes down to proper routing management. Logistics companies assist with bills-of-lading and freight scheduling to reduce the costs of shipping products to the vendors. In addition to reduced shipping costs, by contracting services to a logistics partner, manufacturers eliminate payroll, benefit, and liability costs that are necessary with in-house staff.

The manufacturing industry is at continued risk for disruption amid ongoing volatility in costs and policy decisions and major impacts of the COVID-19 pandemic. The current pandemic-related shortages have fuelled calls from political leaders of both parties for U.S. manufacturers to start producing critical supplies domestically, relying less on European and Asian countries.

The trajectory for US manufacturing in 2022 emerging from the pandemic is upwards. The recovery gained momentum in 2021 on the heels of vaccine rollout and rising demand.

As industrial production and capacity utilization surpassed pre-pandemic levels midyear of 2021, strong increases in new orders for all major subsectors signal growth continuing in 2022. As per Industry Sources GDP growth in manufacturing of 4.1% for 2022 in the US. Even with Lockdown lifting up in Canada there is a surge in the Manufacturing activity in 2021..

Companies Mentioned

• Deutsche Post DHL Group (DHL Supply Chain)
• United Parcel Service Inc. (UPS Supply Chain Solutions)
• FedEx Corporation (FedEx Supply Chain)
• Kuehne + Nagel International AG
• XPO Logistics Inc.
• Ryder System Inc.
• J.B. Hunt Transport Services Inc.
• DB Schenker
• CEVA Logistics
• Geodis
• Penske Logistics Inc.
• Hellmann Worldwide Logistics GmbH & Co. KG
• Americold
• Schnedier National

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