The increase was largely driven by the performance of the largest markets (Western Europe, the U.S. and China) which was markedly better than in 2013. Together, these markets accounted for about 65 percent of the global contract logistics market.
The real turnaround was the strengthening of the European economy, which was a critical factor in the growth of the overall contract logistics market. EU real GDP growth improved from just 0.2 percent in 2013 to 1.4 percent in 2014, resulting in an increase in volumes. More specifically retail sales (excluding the automotive sector) and vehicle production growth displayed positive trends.
The U.S. contract logistics market also enjoyed a strong year where market dynamics in the U.S. contract logistics sector boosted growth. For instance, the fear of a capacity crunch caused by truck driver shortages has increasingly led shippers to shift to dedicated contract carriage solutions.
Chinese growth was also a key driver of the global contract logistics market. China’s market size is thought to have grown by 17.7 percent year-on-year (real growth of 16.6 percent), to reach €18.9bn. Concerns over China's economic performance in the year were generally overblown. Industry reports show that measures of capacity utilisation, inventory turnover, average inventory, new orders and logistics service charges were all higher on average in 2014.
The most disappointing region in terms of market growth was South America; its performance was described by the report’s authors as "terrible". Its contract logistics market is estimated to have grown by just 2.4 percent in the year largely down to Brazil's economic performance in 2014 significantly undershooting expectations.
Commenting on the report's findings, Ti analyst David Buckby said: "The contract logistics market has really benefited from stronger economic fundamentals in most key markets. We have also seen the positive influence of trends such as e-retail which has increased the role and importance of logistics. We believe that global contract logistics growth will steadily accelerate in the coming years, although this relies heavily on European and U.S. economic performance improving and merely a gradual slowdown of the Chinese economy."
