Summary

Key Highlights
Project logistics involves integrated process of planning, organization, managing, processing, and controlling the complete flow of goods, materials, and information associated with the successful completion of a project. Cargo with larger dimensions requires a completely different set of equipment, infrastructure, and experienced personnel. Dealing with cargo of peculiar dimensions is always a challenge for a transporter. However, increasingly, shippers and service providers are becoming more sophisticated in the transportation of oversized and heavyweight shipments. Moreover, manufacturing complexity adds to the challenge. Parts and modular packages are being produced in far-flung parts of the world, then shipped to final destinations. The packages are more critical; therefore, planning has to be detailed. Getting transportation providers more involved in early stages of the planning process has been a trend for the past five years.
Rising oil prices and a robust liquefied natural gas (LNG) and petrochemical construction market may continue to be good news for the project logistics transportation industry through 2019.
There are some established organizations to carry out the project logistics activities across the world. For instance, Global Project Logistics Network (GPLN) is a network of independent small and medium project logistics forwarders. GPLN members handle a vast range of industrial projects work, from infrastructure projects to major energy projects. The members provide services, like transporting, packing/crating, and lifting of heavy, oversized, and out-of-gauge cargo.


Key Market Trends

Increasing Usage of Renewable Energies Boosts Opportunities for Project Logistics Companies

According to global energy sources, the decade-long trend of strong growth in renewable energy capacity continued in 2018, with global additions of 171 gigawatts (GW). It involves hydropower, wind energy, bioenergy, solar energy, and geothermal energy. The annual increase of 7.9% was bolstered by new additions from solar and wind energy, which accounted for 84% of the growth. Significantly, a third of global power capacity is from renewable energy. This trend is expected to continue in the coming years, in order to achieve the global climate objectives and sustainable development goals.

The positive future outlook for renewable energy is driving the current project logistics market. In order to generate the required amount of power in the future, the energy companies need to develop the necessary infrastructure, commence new projects, and install power generation equipment. This scenario is going to create demand for project logistics. Since 2012, about 70% of total turbine installations have been made in the last three months of the year. This late rush not only created huge opportunities for the project cargo companies, but also created third-quarter logistics booking bottleneck. To avoid this, construction companies are looking for multiple options. One option is to move components to installation sites early and using regional laydown facilities to marshal cargo at or near a site well before construction begins. These tactics would help developers avoid trailer shortages during peak shipping periods, allow a longer window for finding qualified heavy-haul drivers who are in short supply, and mitigate cost overruns due to driver overtime and late permitting.

Asia-Pacific Leads the Project Logistics Market

As per the industry sources, the Asia-pacific region leads the market studied, and is also expected to be the fastest growing region. In recent years, infrastructure investment has been a key driver of economic development for countries in Asia-Pacific. Some countries focus on accelerating development of their domestic infrastructure (such as Australia and the ASEAN countries). China's construction industry has undergone significant transformation in the recent years. Since the announcement of the Belt and Road Initiative in 2013, Chinese contractors have undertaken and invested in a vast number of infrastructure projects. According to the China International Contractors Association, in 2017 alone, Chinese contractors concluded 7,217 construction contracts along the Belt and Road and 13,267 construction contracts globally. This presents a significant opportunity for the regional project cargo companies in the coming years, to support those projects with logistics services.

Some of the regional logistics companies are successfully handling heavy cargo with enhanced capabilities. For instance, Megalift, which involves in the transportation of heavy and oversized cargoes, received a contract form General Electric to transport the current largest and most efficient heavy-duty gas turbine in the world. Megalift transported massive General Electric 9HA.02 gas turbine in Malaysia, which came all the way from France to Pasir Gudang port, located at the southern region of Peninsular Malaysia. Since 2018, Megalift has been moving a large number of shipments for the Track 4A project.

Competitive Landscape

The project logistics market is fairly fragmented in nature, with the presence of large global players and small- and medium-sized local players. Most of the global logistics players have a special project cargo division to meet the market needs and demand. Additionally, local players are increasingly enhancing their capabilities, in terms of fleet size, service offerings, industries served, and technology. Global manufacturers are making large and over-sized components in the factory sites (off-site), which creates huge complexities for the heavy cargo haulage companies. The global companies who have high capital and assets can invest in upgraded fleets and can benefit from the aforementioned scenario. On the other hand, regional and local players are also coming up with better industry solutions to support the needs of the clients in executing the projects in scheduled time.

Additional Benefits:

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

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