Automotive Logistics Market Size, Share and Industry Analysis By Activity (Warehousing & Handling, Transportation & Handling), By Type (Finished Vehicle, Automobile Parts), By Mode of Transport (Roadways, Airways, Maritime, Railways), By Distribution (Domestic, International), and Regional Forecast, 2021-2028

The global automotive logistics market size was valued at USD 256.85 billion in 2020 and is projected to grow from USD 262.06 billion in 2021 to USD 393.71 billion by 2028, exhibiting a CAGR of 6.0% during the forecast period. The market is growing with the rising automotive industry, globalization of supply chains, and increasing vehicle production. Technological advancements, efficient transportation, and demand for streamlined logistics contribute to market growth. 

The global impact of COVID-19 has been unprecedented and staggering, with automotive logistics witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 7.31% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Automotive logistics is the entity flow of the automotive producer’s vehicles, components, spare parts, and raw materials in the process of automotive purchase, production, and sales. Logistics in the automotive industry include inbound transportation management of raw materials and components, garage transportation management of the production process, and vehicle and spare parts transportation management, including distribution processing delivery, object purchasing, loading and unloading, storage, transportation, and information processing. With the rapid development of the automotive industry, automotive logistics is instrumental in reducing costs across the supply chain.

Realignment of Supply Chains due to COVID-19 Pandemic May Hamper Growth

The COVID-19 pandemic has compelled automakers to diversify their supply chains (focusing on localizing production) as it has highlighted the risks of heavy dependence on a single region. The majority of the semiconductors used in vehicles are sourced from Taiwan and China. However, manufacturers have been unable to fulfill unexpected rebound in demand owing to post lockdown capacity constraints. Similarly, as OEMs aim to replenish inventories and increase demand, shortages of raw materials such as steel (where production is recovering slowly) are emerging since the third quarter of 2020. Hence, automakers are reconsidering sourcing strategies, and several governments have introduced concrete plans to support critical supply chains.

For instance, in March 2021, the European Union (EU) introduced its Digital Compass strategy. It aims to reduce the reliance on semiconductor supply from Asia and the U.S. and account for 20% of the global semiconductor production by the end of the decade. Similarly, in June 2021, the U.S. government introduced its plan to strengthen domestic manufacturing capabilities. It aims to provide around USD 50 billion in funding to boost domestic semiconductor production and research. Furthermore, the government is also developing a 10-year plan to ramp up domestic supply chains for electric vehicle batteries. Hence, the pandemic-induced supply chain constraints have caused a halt in the globalization trend and substantial realignment of automotive supply chains.

LATEST TRENDS

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The Trend of Third-party Logistics Will Positively Influence Growth

Strengthening the division of labor is the future trend of the automotive supply chain. Functions, such as distribution and parts production, will be separated from manufacturing enterprises. Furthermore, part of logistical management functions will be entrusted to third-party logistics (3PL) to reduce investment and operating costs. Using 3PL enables companies to gain more market information, extend operations in an asset-less way to all corners of the world, and enter international markets more rapidly. Hence, the 3PL model will become the leading form of logistics in the automotive industry.

DRIVING FACTORS

Increasing Efficiency in Finished Vehicle Logistics (FVL) Operations will Drive Market Growth

By increasing operational efficiency, fewer trucks will be required. For instance, NVD, an Irish vehicle distributor, optimized its logistical process with intelligent solutions. NVD has shortened customer lead times and doubled its productivity as they can now load 8-10 cars on a truck within 45 minutes. In comparison, more than 3 hours are consumed in this process across Eastern European facilities. Hence, the increasing efficiency in FVL will drive the market growth rate over the forecast period.

Digitalization of Operations to Augment Market Growth

The increasing adoption of software-based systems by automakers to manage the logistical processes has been delivering substantial benefits, such as the surging supply chain transparency and operational efficiency. For instance, General Motors was an early adopter of the Outbound Logistics Software. During the pandemic-induced crisis, the software (which includes onboard asset telematics and geofencing technology, among other technologies) has delivered considerably better visibility in-vehicle delivery, better truck utilization and is being used to ramp up deliveries to companies’ dealers. Hence, the digitalization of operations will positively influence the growth of the market during the forecast period.

RESTRAINING FACTORS

Shortage of Truck Drivers to Restrain Growth Worldwide

Freight rates have increased rapidly over the last few years. The shortage of truck drivers is a key factor for the higher costs. The trend of decreased driver supply and increasing transport demand from automakers is expected to continue during the forecast period. For instance, according to the German Freight Forwarding and Logistics Association (​DSLV), in Germany, 30,000 drivers on average retire every year. However, only around 2,000 fully trained truck drivers are available for replacement which amounts to a shortage of 45,000 drivers in Germany alone. Similarly, according to the American Trucking Association, there is a shortage of more than 60,000 qualified truck drivers in the U.S. Hence, these factors may restrain the automotive logistics market growth.

SEGMENTATION

By Activity Analysis

Transportation & Handling Segment to Hold Largest Share Owing to Increasing Adoption of Telematics

By activity, the market is segmented into transportation & handling and warehousing & handling. The transportation & handling segment held the largest share of the market in 2020. Companies are actively investing in data-driven solutions to increase transportation efficiency. For instance, certain telematics solutions can effectively manage a truck’s route, and if there is a delay in the delivery of components, the data can be transmitted to the plant in real-time. Hence, a plant shutdown can be avoided, and automobile manufacturers can quickly manage & resolve the issue. Hence, these factors will drive the growth of this segment.

The warehousing & handling segment is anticipated to exhibit a higher CAGR during the forecast period. The rising demand for light commercial vehicles in emerging economies and the increasing demand for expanding the capacity in warehouses and storage facilities are attributed to the growth of this segment.

By Distribution Analysis

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Domestic Segment Dominated in 2020 due to Large Scale Production in Emerging Economies

Based on distribution, the market is segmented into domestic and international. The domestic segment held the largest share of the market in 2020. There is an increase in the number of supportive policies in countries such as India and China to incentivize local production. Furthermore, the easy movement of auto parts and raw materials facilitated by the European Union (EU) across EU countries is fueling the growth of this segment.

The international segment is expected to show good growth in the market. The increasing demand for luxury vehicles and the relaxation of import duties in developing countries will positively influence the growth of this segment.

By Type Analysis

Automobile Parts Segment Dominated in 2020 Propelled by Expansion of E-commerce Sector

By type, the market is segmented into the finished vehicle and automobile parts. The automobile parts segment dominated the market in 2020. This segment accounts for the revenue generated from both aftermarket dealers and original equipment manufacturers from spare parts transportation management.

The increasing adoption of omnichannel strategies, such as e-commerce, is fueling this segment's rapid growth as it enables companies to provide a large variety of products with on-time delivery. Furthermore, the increasing stringency of emission regulations is propelling the demand for aftermarket parts to upgrade the existing vehicle fleets. Hence, these factors will drive the growth of this segment during the forecast period.

The finished vehicle segment is also expected to show considerable growth in the market. Zero-emission vehicle mandates in several developed countries are fueling the demand for electric vehicles (EVs). Furthermore, government incentives, such as tax exemptions, tax credits, purchase rebates, and fee waivers (for parking and charging, among others) are also attributed to the increasing demand for EVs. These factors are expected to boost the growth of the segment during the forecast period.

By Mode of Transport Analysis

Roadways Segment Dominated in 2020 Fueled by Technological Advancements of Infrastructure

By the mode of transport, the market is segmented into roadways, railways, maritime, and airways. The roadways segment dominated the market in 2020. Factors such as low costs and the deployment of intelligent transport systems in regions such as Europe, which allows for high-level connectivity, platooning, and the potential for automated driving, are boosting the growth of the roadways segment. The maritime segment is anticipated to show substantial growth in the market due to the increasing availability of high-performing port services and high-quality infrastructure enabling the elimination of extra costs for transport operators, shippers, and consumers.

REGIONAL INSIGHTS

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Asia Pacific held the largest automotive logistics market share and stood at USD 130.99 billion in 2020. Factors such as the rising demand for vehicles, availability of raw materials, and low wages are responsible for the exponential growth of automobile production in this region. Furthermore, the presence of major OEMs, such as Honda, Toyota, Hyundai, and BYD that are focused on localizing their production to reduce operational costs and export vehicles to various countries and regions, such as the U.S. and Europe are also responsible for the growth of the automotive industry in this region.

Hence, to optimize the supply chain, there is an increasing demand among OEMs for logistical services for transportation, assembly, & storage activities. For instance, in June 2019, GEFCO set up a new dedicated subsidiary in Chongqing specializing in importing and exporting vehicles by rail between Europe, Russia, and China and developing all other GEFCO logistics activities in the central region of China. Hence, these factors are attributed to the exponential growth of the market in this region.

Europe is also expected to show good growth in the market. Factors such as the expanding e-commerce sector, the focus of regional OEMs on restructuring supply chains to avoid dependency on one region, and the increasing demand for electric vehicles will fuel the growth of the market across Europe.

North America is expected to exhibit steady growth during the forecast period. The optimized performance of multimodal logistical chains and improved infrastructure that are helping to reduce logistical costs are boosting the growth of the market in this region.

KEY INDUSTRY PLAYERS

Strategic Partnerships by CEVA Logistics and GEFCO to Strengthen their Leading Positions in the Market

Key players operating in this market, such as GEFCO, DSV, Keuhne+Nagel, Penske Automotive Group, Inc., Ryder System, Inc., DB Schenker, and CEVA, are engaging in productive partnerships and increasing merger & acquisition activities with a focus on capturing a larger share of the market in emerging economies. For instance, in March 2021, GEFCO partnered up with Polestar, an electric performance car brand, to deliver electric cars to individual customers in Shanghai and Beijing.

Similarly, in April 2021, CEVA Logistics won an extension to its contract with Volkswagen to operate the company’s auto spares center at Vinhedo in Brazil. CEVA has been successfully running the site since 2010, and the 132,000 sq m facility is the largest of its kind in Latin America. Hence, an increase in profitability with a focus on international expansion will positively influence the position of key players in the market.

LIST OF KEY COMPANIES PROFILED:

• DB Schenker (Essen, Germany)


• BLG LOGISTICS GROUP AG & Co. KG (Bremen, Germany)


• CEVA Logistics (Baar, Switzerland)


• Kuehne+Nagel (Feusisberg, Switzerland)


• Expeditors International (Washington, U.S.)


• DSV (Hedehusene, Denmark)


• XPO Logistics, Inc. (Connecticut, United States)


• Deutsche Post AG (Bonn, Germany)


• SINOTRANS Limited (Beijing, China)


• C.H. Robinson Worldwide, Inc. (Minnesota, United States)


• GEFCO (Paris, France)


• Ryder System, Inc. (Florida, U.S.)


• Schnellecke group ag & co. Kg (Wolfsburg, Germany)


• Penske Automotive Group, Inc. (Michigan, U.S.)


• Others

KEY INDUSTRY DEVELOPMENTS:

• April 2021 – GEFCO formed a partnership through its subsidiary in the UAE with the leading smart trade enabler, DP World, UAE Region, for new car solutions. It now offers automotive customers a flexible, integrated solution for vehicle storage and handling in covered parking DP World, UAE Region’s flagship, Jebel Ali Port.


• February 2021 – CEVA Logistics completed a full RORO charter for nearly 4,000 cars between Libya and South Korea. These two companies employed a specialist car-carrying RORO vessel as part of a cross-selling initiative.

REPORT COVERAGE

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The global automotive logistics market research report covers a detailed analysis of the industry and focuses on key aspects, such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the key market trends and highlights key industry developments. In addition to the aforementioned factors, the report delivers an in-depth market analysis of several factors that have contributed to its growth over recent years.

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