By Alexander Whiteman
The Asia-Pacific region will take an even bigger share of the global contract logistics market, as the developed economies of Europe and the U.S. lose ground. According to Ti’s Global Contract Logistics 2018 report, contract logistics providers in Asia-Pacific will see their market share increase by almost 7 per cent in the next four years, with China the big winner. “China’s contract logistics market continues to expand at an unrelenting pace, with a 2017 real growth rate of 13.7 per cent,” says the report.
“The economy grew at a stronger rate than the previous year, up 0.2 percentage points to 6.9 per cent… China continues to power ahead as the region’s largest market.” Those numbers saw the country account for almost half the regional growth rate, with expectations that, by 2022, it will account for 41.8 per cent of Asia Pacific contract logistics activity. Despite the market’s strength, the report notes that growth rates in the Chinese market itself fell 0.9 per cent last year, but while the U.S. saw an increase, the report points to “warning signs on the horizon”.
“The threat of import tariffs in order to reduce the U.S. trade deficit is causing tensions with not only China, but other key trading partners, such as the EU, Japan, India, Russia and Turkey,” it says. “And NAFTA’s existence could be in the balance following months of negotiations which have not provided significant breakthroughs.”
As such, Ti forecasts, North America’s contract logistics sector will see its share of the contract logistics market fall by some 2.7 per cent in the next four years. In Europe, the picture is equally as precarious, with Brexit looming large and clouding any forecasts for the region’s economy, leading Ti to suggest a 4.1 per cent drop in its global share. “The UK had a marginally weaker year [in 2017], with Brexit-related uncertainty and stagnant productivity growth undermining the prosperity of multiple sectors of the economy,” it continues. “[Our forecast] reflects the potential downside risks to the European economy, including the uncertain outcome of Brexit and the growth of populist movements.”
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)