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Global Logistics & Freight Industry

The world logistics and freight sector (as part of the wider transportation market) continues to grow thanks to its role in the global economy. Freight is moved using various modes, be it rail, road, sea or air. Logistics ensures proper supply chain management, getting goods and services to their destination without pushing transportation prices too high. Effective management of the supply chain is also necessary to ensure goods arrive in top condition.

Market Segments

The global airfreight industry is worth more than $70 billion and is comprised of almost 12,000 companies worldwide, reports IBISWorld. The airfreight logistics sector involves mostly the transport of commercial cargo. Growth in the industry is dictated by international trade and transport demand concerning time-sensitive freight and mail. The sector’s current phase of decline is mainly due to insufficient technology advancement, volatile profitability and falling industry participation. Airfreight sector performance is expected to remain under a yearly rate of 1% through 2017.

In the world maritime freight industry, the global marine ports and services industry encompasses all revenue collected by owners and operators of both public and private marine ports as well as providers of related services.

The railway freight industry involves the transport of goods by railroads and the operation of rail infrastructure necessary in transporting goods. Around half of all EU rail freight is international, a percentage set to increase in the coming years. Rail freight industry growth will also be fuelled by environmental awareness and the need to secure sustainable mobility.

The world road freight transportation services sector recorded strong growth over the past five-year period, reports Lucintel. Industry performance is expected to maintain a yearly rate in excess of 2% between 2012 and 2017 to reach more than $2 trillion at the end of the five-year period. Factors fuelling growth in this sector include road freight demand, economic growth, the increasing attractiveness of hybrid power train systems, and pressure and encouragement from governments to adopt green technologies.

Regional Market Share

In China, transportation logistics makes up around 55%, with warehousing charges at less than 35% and logistics management fees slightly more than 10%. Close to 45% of the country’s 50-leading logistics outfits are transportation-oriented, and just more than 50% are integrated businesses. The two remaining logistic enterprises are warehousing logistic outfits, accounting for under 5% of China’s logistics enterprises.

The UK logistics sector is worth more than $115 billion. There are close to 200,000 companies in operation in the UK logistics industry, employing almost 2.5 million people. UK freight logistics outfits can manage a distribution system they own or manage one on behalf of another company. More than 60% of UK freight is carried as third-party logistics.

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