Although companies actively work to reduce logistics costs, they remain a significant expense on their income statements. In 2024, businesses across the globe collectively spent US$12.8 trillion on logistics, US$330 billion more than last year, and this massive figure will become even bigger in the next five years.
According to data presented by Stocklytics.com, global logistics costs are forecasted to increase by 12% and hit US$14.4 trillion by 2029.
Logistics Costs to Grow by an Average US$320 Billion Per Year
Over the years, companies worldwide have embraced different strategies to lower logistics costs, streamline operations, and better respond to unexpected market changes. Although technology and automation, improved inventory management, multi-modal transportation, optimized transportation routes, and a switch to green logistics have all significantly helped them reach that goal, the global logistics costs are still quite shocking.
Increased demand for goods, supply chain issues, labor shortages, and rising fuel prices continue fueling global logistics costs. That trend is unlikely to change any time soon. Although global spending on logistics remains significantly below the all-time high in 2021, the market shows a trend of steady growth, which will continue by the end of a decade.
According to the Statista Market Insights survey, companies across the globe will spend US$12.8 trillion on logistics in 2024, US$330 billion more than last year. But that is still $1.88 trillion less than they paid three years ago when global transportation costs skyrocketed.
However, Statista expects global spending on logistics to continue growing by an average of US$320 billion per year, causing companies to spend US$1.8 trillion more in 2029 than they will this year. After reaching US$12.8 trillion in 2024, global logistics costs will hit $13.5 trillion in the next two years and then climb to almost US$14.4 trillion by 2029.
Chinese and Indian Markets to See the Biggest Cost Growth
Although the rising costs trend will affect the entire logistics market, there are still significant differences between the countries, with some facing a much bigger increase than others. Statista data show all major logistics markets are facing double-digit growth, but China will see the biggest cost increase.
By 2029, the total cost in the Chinese logistics market will jump by 17% and hit US$3.88 trillion, making 27% of the world`s total that year. As the third-largest logistics market, India follows China, with a 14.6% increase and US$601.7 billion in total logistics costs in the next five years.
Statista expects the US market to see a 10.5% increase, helping the country`s logistics cost to jump from US$2.2 trillion in 2024 to US$2.42 trillion in 2029. Japan and Russia follow with a roughly 10% growth in this period and US$466 billion and US$442 billion in logistics costs by 2029, respectively.
The post Global Logistics to Hit US$14.4 Trillion by 2029: Report first appeared on Logistics Asia.
