Luton, Bedfordshire, United Kingdom, Nov. 18, 2024 (GLOBE NEWSWIRE) -- The freight and logistics sector play’s a crucial role in the global economy by ensuring the smooth movement of goods from producers to consumers. This extensive industry encompasses the planning, execution, and management of transporting and storing products, services, and information from their point of origin to their final destination. A complex network of transportation modes, such as shipping, air freight, road transport, and rail services, is central to this industry. In addition, it includes storage facilities, distribution centers, and the integration of cutting-edge technologies aimed at optimizing supply chains and providing real-time tracking.
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Diesel Price Increases and Supply Concerns
Given that diesel is derived from crude oil, its prices are closely tied to fluctuations in crude oil markets. Diesel prices saw sharp increases in the spring of 2022, particularly in the United States and Europe, driven by supply concerns and geopolitical tensions. In the U.S., diesel futures reached approximately USD 3.80-4.00 per gallon in the fall of 2022, despite a decrease in crude oil prices in the second half of the year. These increases were exacerbated by seasonal demand and concerns about reduced diesel supply to Europe following the sanctions on Russian oil exports.
However, by 2023, diesel prices in Europe and the U.S. began to moderate as Europe successfully replaced much of the diesel it would have imported from Russia with imports from other regions, including the Middle East and North America. This shift in supply sources helped stabilize the market, although prices remain higher than pre-crisis levels.
Long-Term Market Outlook
The ongoing Russia-Ukraine war continues to cast uncertainty over global oil and petroleum product markets, with sustained supply chain disruptions and geopolitical risks likely to keep prices volatile. As demand continues to rise globally, particularly in emerging markets, further fluctuations in prices are expected in the coming years. Additionally, efforts to transition to alternative energy sources and reduce reliance on fossil fuels could help mitigate some of the long-term pressure on global oil markets.
Gasoline Prices and Market Dynamics in 2022
In 2022, the global average price of gasoline surged by approximately 18-22%, reaching around USD 1.15-1.25 per liter, surpassing pre-pandemic levels. This price increase was largely attributed to heightened risks of supply disruptions due to the war, compounded by rising crude oil prices and inflationary pressures. Europe, in particular, experienced the highest gasoline prices, with countries such as Iceland, Norway, Denmark, and the Netherlands seeing prices as high as USD 7-8 per gallon due to the regional supply constraints.
Brent Crude Oil Prices and OPEC Production in 2022
The price of Brent crude oil saw significant fluctuations throughout 2022. It peaked in the first half of the year, averaging around USD 95-105 per barrel, before declining in the second half. Despite this dip, oil prices have remained high due to sustained supply disruptions and geopolitical uncertainties. For example, OPEC crude oil production decreased from 29-30 million b/d in Q3 2022 to 28-29 million b/d in Q4 2022. Notably, production cuts by Russia and Saudi Arabia of around 1.2-1.5 million barrels per day from their output, coupled with rising global demand, have kept prices elevated into 2023.
Global Infrastructure Investments Show Robust Growth with Asia-Pacific Leading the Charge
Infrastructure investment continues to grow across the globe, with Asia-Pacific at the forefront, followed by Europe and the United States, as regions enhance their transport, aviation, and railway systems to meet increasing demand and sustainability goals.
Asia-Pacific: Leading the Infrastructure Boom
China remains a dominant player in the Asia-Pacific region, bolstered by large-scale government investments. For instance, in recent years, China’s transport sector saw funding allocations in the range of USD 3-4 billion to expand road infrastructure. The government’s ambitious plan aims to expand the country’s highway network to approximately 300,000 km, including over 160,000 km of expressways by 2035. India, meanwhile, has been a key contributor to global infrastructure projects, with an estimated USD 20-30 billion worth of ongoing or planned projects, particularly in the railway and road sectors, signalling strong growth in emerging economies.
Europe: Investments in Sustainable Aviation and Logistics
In Europe, significant infrastructure developments continue to shape the market. Germany recently marked a milestone with the development of a major air freight facility at Frankfurt Airport. Spanning around 50,000-60,000 sq. m, the project, a collaboration between DHL and Fraport AG, is scheduled to open by mid-2025. Additionally, France has committed investments in the range of USD 400-600 million to advance low-emission aircraft and sustainable aviation fuels (SAF), further supporting the region's environmental goals.
United States: Pushing Forward with Railway and High-Speed Rail Projects
The United States continues to invest heavily in infrastructure, with 1,800-1,900 active projects across the country. Among the prominent initiatives is the California High-Speed Rail Line, with an estimated value of USD 100-120 billion, which aims to connect major metropolitan areas through fast, efficient rail travel. The U.S. government also continues to prioritize rail infrastructure development, with major investments planned in projects across the Northeast Corridor and regions in Southeast Asia and Japan.
Insights on Global Infrastructure Trends
- Rail Networks Expansion: Global investment in railways remains high, with the Maglev train project in Japan estimated to cost between USD 50-70 billion by 2030, revolutionizing long-distance travel.
- Southeast Asia’s Transport Investments: Countries like Thailand and Vietnam are focusing on metro systems, with projects valued at USD 2-3 billion each, addressing rapid urbanization and the growing need for public transit.
- Decarbonization in Aviation: Globally, investments in sustainable aviation fuels (SAF) and next-generation aircraft technology are becoming pivotal, with companies like Airbus and Boeing pushing for innovation to meet future emission reduction targets.
Strong Growth Potential Amid Market Uncertainties and Geopolitical Challenges
The global freight and logistics sector continues to experience significant growth despite ongoing uncertainties, including the residual impacts of the Russia-Ukraine war. Key markets in Asia-Pacific, North America, and Europe remain dominant, yet the sector is facing pressures from rising transportation costs and shifting geopolitical dynamics. Notably, India is grappling with high logistics costs, with transportation accounting for approximately 60-65% of total logistics expenditures. In addition, logistics costs in the country represent roughly 12-15% of India's GDP. The introduction of zero-emission trucks (ZETs) has the potential to dramatically reduce fuel expenditures, cutting transportation fuel costs by up to 40-50% over the truck’s lifetime. If ZET adoption accelerates, India could save billions of dollars, with the potential to reduce diesel consumption by over 800 billion liters by 2050, translating to savings of up to USD 130-150 billion in oil costs.
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Technological Advancements Driving Efficiencies
The expansion of logistics hubs such as Bahrain’s Global Sea-to-Air Logistics Hub, launched in 2021, promises to deliver faster, more cost-effective freight transportation solutions. Across Asia-Pacific, the rapid shift toward automated warehousing technology is driving significant operational improvements. Approximately 80-85% of warehouse operators in the region are investing in advanced automation technologies. This transformation is set to enhance efficiency and reduce costs, positioning the region for substantial market growth in the coming years.
The E-Commerce and Manufacturing Boom Fueling Market Expansion
The e-commerce and manufacturing sectors are key drivers of the growing demand for warehousing and logistics solutions. It is anticipated that warehousing space globally will increase by 50-60% by 2030, surpassing 600-700 million sq. ft. of leasing activity. This surge in demand for storage capacity is particularly evident in the United States, which remains the largest market by revenue, while China continues to lead in parcel volume production. In 2021, China shipped over 100-120 billion parcels, with the global parcel volume expected to see a compound annual growth rate (CAGR) of 7-9% from 2022 through 2027. E-commerce-related parcel volumes alone are expected to grow by 15-20% annually through the forecast period.
Global Freight and Logistics Market Trends
The North American transportation and storage market saw significant growth in 2022, expanding by approximately 18-20% year-over-year, driven by increased demand for warehouse and distribution center’s. This surge in demand is largely attributed to the growing needs of e-commerce, which has continued to fuel the market. The infrastructure upgrades in the region, including government-backed initiatives such as the Port Infrastructure Development Program (USD 700-750 million allocated for 2022), have bolstered supply chain efficiency and job creation.
Asia-Pacific: Dominance in Global Freight Transport
The Asia-Pacific region is witnessing substantial growth in freight transport, especially within shipping, which represents a significant portion of global seaborne trade. The region houses nine of the world’s busiest container ports and accounts for over 40-45% of global surface freight transport. By 2050, freight demand in the region is expected to triple, driven by rising consumer demand and expanding manufacturing sectors. Notably, China and other major players in the region continue to dominate, with shipping serving as the backbone of their trade infrastructure.
Germany’s Position in Global Transport and Warehousing
Germany has positioned itself as a global leader in transportation and warehousing, surpassing countries like France and the United Kingdom in terms of imports and exports. With strong investments in infrastructure, the German government allocated over EUR 10-15 billion (USD 10-15 billion) in 2022 to enhance federal highways and waterways, which are crucial for maintaining Germany’s role as a logistics hub in Europe. This commitment to infrastructure development is expected to continue in the coming years, facilitating smoother logistics operations and enhancing global trade connectivity.
Global Foreign Direct Investment (FDI) Trends
On a global scale, foreign direct investment (FDI) flows in 2022 decreased by 20-25%, reaching a total of approximately USD 1.2 trillion. However, the United States remained the largest recipient of FDI inflows, securing about USD 300-320 billion in investments. China followed, receiving USD 160-180 billion, although at a reduced pace compared to previous years. While cross-border M&A activity slowed, greenfield investments (new project investments) showed positive signs, particularly in sectors like renewable energy and infrastructure development, which are expected to drive future growth.
Impact of the Russia-Ukraine Conflict on Global Oil and Petroleum Markets
The ongoing conflict between Russia and Ukraine has had a significant impact on global crude oil and petroleum product markets, disrupting supply chains and driving up prices.
Key Players:
- Allcargo Logistics Ltd.
- Americold, Aramex
- Bollore logistics
- C.H Robinson
- CJ Logistics
- CTS Logistics Group
- Culina Group
- International Distributions Services
- J.B. Hunt Transport, Inc.
- Japan Post Holdings Co., Ltd.
- JD Logistics
- KEX Express (US) LLC
- DB Schenker
- Kintetsu World Express
- Kuehne + Nagel
- Dachser
- DP World
- DSV A/S (De Sammensluttede Vognmænd af Air and Sea)
- Expeditors International of Washington, Inc.
- GEODIS
- GXO Logistics
- Hellmann Worldwide Logistics
- Hub Group Inc
- La Poste Group
- Landstar System Inc.
- LOGWIN
- LX International Corp
- Mainfreight
- NFI Industries
- NYK (Nippon Yusen Kaisha) Line
- Orient Overseas Container Line (OOCL Logistics)
- Penske Logistics
- Poste Italiane
- Ryder System, Inc.
- Savino Del Bene
- Sinotrans Limited
- TIBA Group
- Total Quality Logistics
- Uber Technologies Inc.
- XPO, Inc.
- Yamato Holdings Co. Ltd.
Freight and Logistics Market Recent Developments:
- Aramex Expansion in Saudi Arabia (March 2024): Aramex inaugurated a new regional office in Riyadh, Saudi Arabia, strengthening its presence and logistics capabilities. This move aims to enhance service offerings for both new and existing businesses while contributing to Saudi Arabia’s Vision 2030 by reinforcing its logistics infrastructure as a global hub.
- Aramex’s Electric Vehicle Fleet (March 2024): As part of its sustainability efforts, Aramex introduced a fleet of fully electric motorcycles for last-mile delivery in the UAE. This initiative aligns with its goal to achieve 98% Electric Vehicle (EV) usage by 2030, reflecting its commitment to sustainability and the Science Based Targets initiative (SBTi).
- C.H. Robinson's New Freight Scheduling Technology (February 2024): C.H. Robinson launched innovative technology designed to optimize freight shipping by automating the scheduling of pickup and delivery appointments. This AI-driven tool uses transit-time data from millions of shipments to optimize efficiency and improve appointment accuracy.
- DHL’s Automated Sorting System in the US (2024): DHL implemented a state-of-the-art automated sorting system at its facility in the US. This system significantly enhances sorting efficiency, handling up to 25,000 packages per hour and improving overall logistics speed. The system is a part of DHL’s continuous effort to leverage automation for greater operational efficiency
Freight and Logistics Market Segmentation
By Shipping type
- Airways
- Railways
- Roadways
- Waterways
By Service
- Inventory Management
- Packaging
- Warehousing
- Transportation
- Distribution
- Custom Clearance
- other
By End-Use
- Manufacturing and Automotive
- Oil and gas
- Mining
- Quarrying
- Agriculture
- Fishing
- Forestry
- Construction
- Distributive trade
- Health care
- Pharmaceutical
- Chemicals
- Telecommunications
By Geography
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
- Rest of the World
- Middle East
- Africa
- Latin America
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