Market Trends of APAC Contract Logistics Industry
Demand From The Manufacturing And Automotive Sector Is Driving The Contract Logistics Services
Asia-Pacific is one of the world's manufacturing hubs, accounting for almost 48.5% of global manufacturing output. Today, more countries worldwide are building advanced manufacturing capabilities to support Industry 4.0 growth. Industry 4.0 is revolutionizing the way global manufacturers produce and distribute their products. AI, cloud computing, analytics, AI, and machine learning are just a few technologies leading businesses looking to incorporate into their operations.
In 2022, China exported around USD 9.88 trillion worth of motor vehicles for transporting goods, representing a growth of about 50.57%. Vietnam has also become an increasingly attractive market for manufacturers due to the country's regional centrality, high market integration, and low production costs. Samsung, Apple, Nintendo, LG, Panasonic, and Intel are all based in Vietnam. Vietnam is also making progress in the value chain by positioning itself as an attractive market for mid-tech due to its electronic sector.
In March 2023, China's industrial output increased by 3.9% YoY in the first quarter of 2023, according to the NBS, indicating a slight improvement in the country's economic recovery in the wake of the COVID-19 pandemic. Value-added industrial output grew by 3% Y-o-Y, representing a YoY increase of 0.3 percentage points compared to the previous quarter. In 2022, Chinese car manufacturers produced 27.02 million units, an increase of 3.4% YoY, while sales rose 2.1% Y-o-Y to 26.86 million. China is consolidating its position as the world's most attractive manufacturing hub, while Thailand benefits from cost profile improvements.
China Is Leading The Way In The Contract Logistics Market
Companies are pressed to create more advanced distribution channels as customer demand in China grows. It is due to the increased demand for higher-priced consumer goods and perishable foods that require logistics management, including better security and handling. It is only one of the more profound changes in these economies that point to a significant growth in the demand for high-end services in China and developing countries over the next few years.
China is expected to lead the Asia-Pacific contract logistics market. The contract logistics market in China is growing steadily. This has created new challenges for the sector, such as the need to expand product and service offerings, the need for more efficient networks, and the need to control variable costs.
The Chinese contract logistics market is mainly concentrated in consumer retail, automotive, medicine, electronics, and other industries, with the consumer retail industry making up about 50%.
In February 2023, Cainiao Network, a logistics arm of e-commerce giant Alibaba Group Holding, announced a new agreement to build Poland's most extensive parcel locker network with German courier giant Deutschlandpost DHL Group. The agreement with Deutsche Post ECommerce Solutions, a Deutsche Post E-commerce Group division, provides a foothold for the Chinese technology giant into one of Europe's fastest-growing e-commerce markets. According to the agreement, Deutsche Post ECommerce Group (DHL) and Cainiao Network (the logistics arm of Alibaba Group Holding) will jointly invest EUR 60 million (USD 64.75 million) in the construction of parcel lockers throughout Poland. The two companies will combine their existing networks to provide consumers with more convenient access to parcel lockers, which will be installed at critical locations with modern, easy-to-use interfaces. DHL's parcel shop network in Poland has already reached 1,200 locations, and DHL's parcel lockers have tripled in quality and speed in the past three years.
