Transportation & Logistics Industry Update 3Q23 Executive Summary

The transportation and logistics industry saw container shipping freight rates fall in 3Q23 toward levels that resembled those of 2019, while artificial intelligence/machine learning (AI/ML) technologies continued to offer increased visibility into supply chains and the last-mile delivery sector continues to revolutionize as the robust growth of e-commerce remains steady. Trends such as market consolidation and a surge in logistics rents were also prominent in the industry during the quarter.

Despite the global economy showing unexpected strength in 1H23, persistently high inflation and substantial downside economic risks lead to a more subdued outlook for the rest of the year and into 2024, with the OECD’s Interim Economic Outlook forecasting modest global growth of 3.0% in 2023 and 2.7% in 2024.¹

Globally, headline inflation, which refers to prices such as food and energy, is gradually easing, though it remains above central bank targets in many countries and necessitates ongoing monetary policy restraint, primarily owing to elevated core inflation driven by the services sector and tight labor markets.²

Within the 3PL market specifically, the Asia Pacific region is expected to register the fastest growth due to a thriving e-commerce industry, and the growth of manufacturing sectors, which are boosting the need for efficient and adaptable supply chain solutions.³

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Footnotes:

1: “Confronting inflation and low growth,” OECD Economic Outlook Interim Report (September 2023).

2: “Confronting inflation and low growth,” OECD Economic Outlook Interim Report (September 2023).; “Positive growth continues, albeit fragile, and with persistent inflation posing a key risk,” OECD (September 19, 2023).

3: “Global Third-party Logistics Market Size To Worth USD 2,247.95 Billion by 2031 | CAGR of 8.3%”, Spherical (September 2023).