FMCG Logistics Market Size, Share & COVID-19 Impact Analysis, By Mode of Transportation (Railways, Airways, Roadways, and Seaways), By Product Type (Food & Beverages, Personal Care, Household Care, and Other Consumables), and Regional Forecasts, 2023-2030

The global FMCG logistics market size was valued at USD 108.50 billion in 2022 and is projected to grow from USD 111.43 billion in 2023 to USD 143.26 billion by 2030, exhibiting a CAGR of 3.66% during the forecast period. Asia Pacific dominated the global market with a share of 50.66% in 2022.

Fast-Moving Consumer Goods (FMCG) are the most extensive collection of consumer goods with different product categories including health, home, personal care, food, drinks & daily needs, and many others.

The major growth drivers for the consumer goods industry are lifestyle changes, ease of access, and rapid changes in consumption habits. Consumers expect a wide range of products to be readily available in physical and online stores. A consumer goods company connects its efficiency, agility, and sustainable global supply chains to achieve this goal. Fast-moving consumer goods manufacturers rely on collaborative logistics solutions to get goods to stores faster and more cost-effectively. This includes various supply chain activities, such as inventory management, transportation, distribution network design, warehousing, and demand forecasting to meet consumer demand while minimizing costs and ensuring product freshness and quality.

Most FMCG logistics companies operate on a hub-and-spoke model, which delights consumers with faster deliveries. A hub-spoke model is a centralized storage and delivery system similar to the structure of a bicycle wheel. The center of the wheel is the hub or delivery center, and each spoke represents the delivery direction. Therefore, most FMCG logistics companies locate their distribution centers in the heart of developed cities to provide fast delivery to consumers. In addition, fast-moving consumer goods companies are outsourcing their logistics operations to bridge the gap between sales planning and operational processes, improve forecasting, streamline inventory, and shorten delivery time.

COVID-19 IMPACT

Disruption in Supply Chain Hindered Market Growth Amid COVID-19 Pandemic

In 2019, the COVID-19 pandemic disrupted supply chain operations across the world. The crisis had put logistics and transportation resources under tremendous pressure. Shippers faced uncertainty while moving the goods due to the enforcement of exit restrictions in some countries. Demand and supply imbalances and insufficient capacity to provide long-distance and last-mile fulfillment services severely disrupted FMCG logistics industry networks. Additionally, the pandemic shifted consumer behavior due to panic buying and stockpiling of essential goods. Most consumers preferred buying goods online as stores were closed due to stringent social distancing norms; hence, e-commerce sales increased during the pandemic. This forced the entire FMCG industry to switch to online sales of goods. Various FMCG companies had resumed their operations by adhering to stringent social distancing norms. This factor led to an increase in demand for FMCG logistics even during the pandemic period.

LATEST TRENDS

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Increased Diffusion of E-commerce in FMCG Business to Set Positive Trend for Market Growth

Selling and buying goods over the Internet is known as e-commerce. E-commerce now accounts for about 7% of the global FMCG market. It is revolutionizing the global retail industry by offering multiple shipping options including tracking options, easy returns, visibility into inventory availability, and expected delivery times. Additionally, online grocers and retailers, such as Flipkart, Big Basket, and Amazon make FMCGs easily accessible with discounts, festive sales, same-day delivery options, and more.

Additionally, FMCG companies' launch of direct-to-consumer sales initiatives has enabled consumers to order FMCG products directly to their homes through online channels, driving the FMCG logistics market growth. For example, in May 2020, PepsiCo launched two direct-to-consumer websites where shoppers can order the company's products. In August 2020, Storia Food & Beverage launched shop.storiafoods.com, a direct-to-consumer e-commerce initiative. Therefore, consumer goods companies and e-commerce platforms are working with logistics providers to deliver goods faster and cheaper, driving the global market.

DRIVING FACTORS

Rising Use of Advanced Technologies in Logistics to Drive Market Growth

Growing adoption of advanced technologies, such as Internet of Things (IoT), AI, robotics & automation, blockchain, drones, autonomous vehicles, data analytics, and supply chain visibility in FMCG applications have entirely changed the logistics industry. Companies have started equipping their FMCG supply chains with these technologies. IoT plays a crucial role in FMCG logistics by connecting physical devices and objects to the internet. IoT sensors and devices can track and monitor inventory levels, temperature & humidity conditions, product quality, and even vehicle performance. This real-time data allows companies to optimize their supply chain, reduce waste, and ensure timely delivery of goods and services.

Drones and autonomous vehicles are being explored for last-mile delivery in FMCG logistics. Drones can deliver small packages quickly in congested urban areas, while autonomous vehicles have the potential to optimize transportation routes, reduce delivery time, and lower costs. For instance, in March 2023, Google launched its drone delivery network technology. The company anticipates that the drone delivery network can complete millions of orders within 12 months.

Rising Use of Cloud-Based Logistics Management to Augment Market Expansion

The transportation and logistics industry is seeing an increase in technological breakthroughs. By 2025, small enterprises aim to invest twice as much on technology. To keep their monopoly on the market, the major corporations that operate there are concentrating on technological developments. The supply chain systems of all significant businesses are becoming digitalized. Additionally, a lot of logistics businesses are developing cloud-based transportation management systems (TMS) and migrating their TMS to the cloud. Automation, the smooth eradication of manual activities, the streamlining of workflows, and the reduction of additional IT infrastructure expenditures are all benefits of cloud-based TMS. It also gathers information from numerous internal and external sources, which increases visibility. Anywhere in the world can implement and use a cloud-based TMS.

RESTRAINING FACTORS

Lack of Total Control Over Logistics Operations could Restrain Market Growth

Although they lack direct control over the procedure in this case, manufacturers and retailers must rely on the dependability, expertise, and consistency of their logistics service providers. Manufacturers run the risk of endangering the quality and safety of their products because they can't even watch the job being done in their warehouses. Third-party/fourth-party logistics outsourcing (3PL/4PL) might jeopardize the confidentiality of customer data as well as products and technology. This lack of control over logistics services may prevent the expansion of the market.

SEGMENTATION

By Mode of Transportation Analysis

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Roadways To Dominate Market Owing to Seamless Movements of Goods at Less Cost

Based on the mode of transportation, the market is segmented into railways, airways, seaway, and roadways. The roadway segment holds the largest market share and is expected to maintain its leading position in the market throughout 2023-2030. Roads are one of the most commonly used means of transportation and are widely distributed in Europe, Asia, Africa, and North America. A single customs paperwork process ensures the smooth movement of goods between various states and countries. It offers a complete door-to-door service and is one of the most economical transportation options. This factor is expected to maintain the dominance of road transportation over 2023-2030.

The seaways segment is expected to record the highest CAGR in the market during 2023-2030. Improved infrastructure, such as canals shortening the trade routes, rising trade agreements, and increasing consumer disposable income have increased the global demand for international goods. These factors will enable the seaways segment to maintain its second-leading position throughout 2023-2030.

The rail & air transportation segment is expected to grow steadily during 2023-2030. Railroads use lesser fuel than on-road vehicles and can have multiple wagons which are operated by one driver. This results in multiple commodities being transmitted at lower cost and at a single run.  Global infrastructure spending on new and existing rail networks continues to grow. As business and commercial activities increase, the need for transportation of people and goods is increasing according to the world's population. In addition, airlines offer many advantages, such as faster transportation, fewer documents, and higher cargo security. However, it is more expensive than other modes of transportation and has size and weight restrictions.

By Product Type Analysis

Food & Beverages to Boost Dependence on FMCG Logistics Due to Increasing Demand For Clean Label Products

By product type, the market is fragmented into food & beverages, personal care, household care, and other consumables. The food & beverage sector has the largest share of the global market. The segment’s growth can be attributed to various food & beverage sectors, such as dry packaged goods, beverages, cheese/dairy, frozen foods, ingredient suppliers, and meat processors. A survey by Tompkins Associates, McHugh Software, and Symbol Technologies shows that most food & beverage executives embraced these new supply chain processes. Corresponding investments in new technologies are a strategic priority. However, the focus should be on lower operating costs and better functionality in logistics and transportation. Air-conditioned storage & transportation, advanced warehouse management systems, advanced packaging solutions, and product safety tracking technologies are some necessities associated with food & beverage logistics.

Additionally, demand for clean-label products is growing rapidly as awareness of healthy eating has increased significantly. Clean label products contain no additives, artificial flavors, colors, or artificial preservatives. Demand for functional drinks is rising, and many people are looking for specialty drinks to keep them hydrated and nutritionally balanced. These factors are anticipated to maintain the dominance of food & beverage segment over 2023-2030.

The personal care products segment holds the second-largest position in the market. These products include skin moisturizers, shampoos, perfumes, lipsticks, eye & facial makeup preparations, hair colors, and toothpaste. Personal care products are easily available through various distribution channels, such as specialty stores, pharmacies, and beauty salons, thus contributing to the segment’s revenue growth. In addition, it is expected to provide strong growth opportunities as male consumers are increasingly focusing on skincare to improve their appearance and take better care of their skin. Increased investments in research and development of new and effective products also bode well for the market growth. Growing consumer awareness of vegan, organic, natural, and earth-friendly cosmetics has encouraged manufacturers to launch new products and expand their global footprint. For example, in June 2021, a socially responsible French beauty company SO'BiOétic launched its organic beauty line in the U.S., offering eco-friendly and healthy beauty items. The personal care and other consumer goods segments’ growth in the market is primarily driven by the aging population and increasing per capita spending on beauty and personal care products. Demand for laundry and home care products will see promising growth as consumers became more conscious of personal and household hygiene after the COVID-19 pandemic.

REGIONAL ANALYSIS

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Geographically, the market is divided into North America, Europe, Asia Pacific, and the Rest of the World.

The Asia Pacific market was valued at USD 54.97 billion in 2022 and is projected to reach USD 74.75 billion by 2030, at a CAGR of 4.03%. The region is anticipated to dominate the market over 2023-2030.

During 2023-2030, Asia Pacific is expected to register the largest FMCG logistics market share. The market in the region is experiencing steady growth due to the increasing purchasing power of the middle class and lower production costs due to commercialization. Rapid growth projections for value-added services in China and other emerging markets will fuel the market, such as increasing demand for expensive consumer goods and perishables that require logistics management for better safety and handling. This shows a wide range of changes in Southeast Asia, with the region rapidly becoming a destination for growth opportunities for the consumer goods market. SF Express, China's leading express delivery company, acquired Kerry Logistics for USD 2.3 billion in 2021 to expand its container logistics, freight forwarding, and express delivery network in Southeast Asia.

North America holds the second-largest position in the market as there is a vast presence of a diverse coastlines and cruising destinations. In order to address growing environmental concerns, there is an increasing demand for green logistics, which is one of the main elements promoting this region's growth. Additionally, the market is anticipated to be driven between 2023 and 2030 by the growing e-commerce sector and the trend of online shopping in nations like the United States and Canada. Low-emission FMCG logistics are expanding as a result of the region's increasing use of electric vehicles. The use of electric cars in urban logistics for delivering orders to physical points of sale and private residences may be made possible by the development of batteries and new-generation engines. For instance, Maersk bought 110 electric Volvo VNR trucks for North America in 2022. Over the years 2023–2030, this factor is anticipated to assist the area in maintaining its second-largest market share.

Europe is expected to be the fastest-growing region in the coming years. The region’s growing fast-moving consumer goods industry, expanding e-commerce market, and increasing adoption of advanced technologies in logistics will offer the regional market significant growth opportunities. A rise in mergers & acquisitions in the logistics industry, growing focus of logistics providers on truck platooning, and increasing adoption of the sharing economy will significantly impact the growth of the FMCG logistics in the region. However, shortage of skilled drivers, high operating costs, and high technology investment costs may hamper the market growth. To grow faster, vendors must focus on opportunities in fast-growing segments, while maintaining positions in slower-growing ones.

KEY INDUSTRY PLAYERS

Collaboration With Automotive Leaders By One Network Enterprises (ONE) to Strengthen Its Market Prospects

One Network is an intelligent business platform for autonomous supply chain management. The platform enables leading global companies to realize tremendous benefits and efficiencies in their supply chain networks across their ecosystem of business partners. It demonstrated the tremendous value of matching supply with demand and collaborating in real-time with multi-party networks.

In March 2021, One Network Enterprises (ONE) announced that its customer Cummins Inc., one of the world's leading energy companies, will launch One Network Enterprises, which incorporates attribute-based forecasting, multi-level inventory optimization, and inbound shipment visibility, and also announced the Network platform's introduction. One Network's platform and industry-leading supply chain control tower solution will enable Cummins to improve real-time visibility across its European aftermarket operations. It will also help the company identify and optimally resolve potential issues before they occur.

LIST OF KEY COMPANIES PROFILED:

• C.H. Robinson Worldwide Inc. (U.S.)


• United Parcel Service, Inc. (UPS) (U.S.)


• FedEx Corp (U.S.)


• Deutsche Post AG (Germany)


• Kuehne+Nagel International AG (Switzerland)


• A.P. Moller – Maersk (Denmark)


• Schenker AG (Germany)


• DSV Solutions (Denmark)


• Nippon Express Holdings, Inc.(Japan)


• Landstar System Holdings, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2023: FourKites and RCS Logistics have announced a partnership to provide RCS customers with a one-stop service, offering complete visibility into ocean, water, air, intermodal, and overland (OTR) transportation. Using FourKites' real-time supply chain data, RCS' internal teams and customers will benefit from automatic, real-time visibility into the status and location of shipments in transit and storage across the world.


• November 2022: AP Moller – Maersk introduced a new sea freight service with 'Shaheen Express'. It will cycle between Mandla, Pipavav, Jebel Ali, Dammam, Jebel Ali, and back to Mandla to provide stable and reliable services to the India-UAE-Saudi Corridor. The new service responds to increased demand from customers trading between the Indian and Gulf markets.


• July 2022: Kuehne+Nagel Ireland announced the opening of a temperature-controlled facility to meet the growing needs of the country's burgeoning healthcare sector. The facility is located near Dublin Port and Airport, and was scheduled to open in late July 2022. This move would increase Kuehne+Nagel's medical footprint in Ireland to 40,000 square meters, along with three medical supply warehouses that are currently in operation.


• January 2021: C.H. Robinson announced opening a new technology center in Cork, Ireland to deliver personalized solutions to shippers and carriers using industry-leading technology developed by supply chain experts. The expansion was said to be the company's commitment to accelerating the pace of innovation and investing in industry-leading technology to deliver best-in-class technology and services to its customers and operators.

REPORT COVERAGE

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The FMCG logistics market report provides a detailed analysis and focuses on key aspects, such as leading companies and product types. Besides, the report offers insights into the latest market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the market's growth in recent years.

Report Scope & Segmentation