Summary

The Asia-Pacific freight and logistics market is expected to witness a CAGR of >6.1% during the forecasted period of 2020-2025. The market is driven by the region considered as a global logistics hub and the exponential growth in the e-commerce segment.

Key Highlights
For the freight and logistics market, Asia-Pacific is the fastest-growing region globally. This is due to the increasing logistics in the ASEAN countries and the presence of major economies like China and India. Additionally, the high government support for logistics sector in the region is also a factor boosting the industry growth.


Leading countries in the region are observing faster technological integration in the logistics process. In India, 80% of freight moves by road and the trucking industry is adopting industry-leading tracking technology to help trace and predict the exact delivery times. Thailand is incorporating IBM and Maersk’s blockchain project to streamline its shipment monitoring processes.




Key Market Trends

Manufacturing and Automotive Industry Growth Driving the Logsitisc Market

The manufacturing sector has been one of ASEAN’s key economic growth drivers. One key factor propelling demand in this sector is a 640 million strong regionwide consumer base with a growing middle-income segment. Rising incomes shifting consumption trends have also contributed to growth in this sector. Besides that, economies in the region have low operating costs which attract businesses from larger manufacturing bases.

ASEAN member states already have an inherent strategic advantage as an automotive production and export hub catering to the wider Asia-Pacific region. With Thailand and Indonesia leading the way, the region is positioning itself as a cost-effective production hub for new energy vehicles powered by electric and hybrid systems.

Furthermore, the Indian auto-components industry has experienced healthy growth over the last few years. The auto-component industry of India has expanded by 10.6% to reach a level of US$ 56.2 billion in FY19. The auto-components industry accounts for 2.3% of India’s Gross Domestic Product (GDP) and employs as many as 1.5 million people directly and indirectly each. A stable government framework increased purchasing power, a large domestic market, and an ever-increasing development in infrastructure have made India a favorable destination for investment.

The growth in the manufacturing and automotive industry in many of the Asia-Pacific countries is a factor the has seen the logistics industry riding this growth wave. Additionally, it is observed that the manufacturing and automotive industry is a major end-user for the logistics industry.

India Observes Cold Chain Growth

India is one of the fastest-growing countries, in terms of the cold chain industry, in the world. This is primarily because of the changing consumption or eating patterns, and overall improvement of the quality bar, and making the products export-worthy to developed countries.

India is currently the world's largest producer of milk, the second-largest producer of fruits and vegetables and has a substantial production of seafood, meat, and poultry products – all major categories demanding robust and efficient management of its supply chain. Meat, seafood, and bio-pharmaceuticals – to buoy growth of the cold chain industry in the next five years. These segments cater mainly to the export markets, where organized players are preferred due to stringent quality requirements and regulations. It is expected that the cold-chain industry will witness a compound annual growth rate of 13-15% in the five fiscals through 2022, compared with 11-13% in the previous five. This will swell the industry to Rs 47,200 crore in fiscal 2022 from Rs 24,800 crore in fiscal 2017.

Additionally, the biomedical and pharmaceutical manufacturing industry is also a key driver for the growth of the temperature-controlled supply chain. Government policies are also aligned to support and leverage this growth. The Indian Government and National Centre for Cold Chain Development (NCCD) are focusing on infrastructure development projects, with 135 cold chain projects, 40 mega food parks, and grants approximating Rs. 7,000 crore, also policies in the form of subsidies, tax benefits, and technical training are helping drive the cold chain logistics industry n the country.

Competitive Landscape

The Asia-Pacific freight and logistics market is fragmented with a large number of players competing in the logistics space. The market is dynamic and observed the presence of major players as well as startups that are trying to disrupt the market by digital tools. With the Asia-Pacific region being the fastest-growing region globally the competition to maintain the market share as well as expand to new regions is fierce.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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