DHL leads the way in contract logistics

DHL1Report shows acquisition is still best opportunity for entering new marketsDHL Supply Chain is still the market leader in contract logistics, controlling 8% of the overall market with revenues of €13 billion ($16.9 billion) in 2012, according to the latest report by Transport Intelligence (TI).

In second place was CEVA with revenues of €3.9 billion.

Interestingly, the report shows the top ten players hold a combined market share of just 22% in a sector worth €159.3 billion in 2012.According to the report, although the global economic downturn has resulted in a decrease in manufacturing, the instability has provided opportunities for acquisition activity – for example, Russian Railways’ €800 million acquisition of GEFCO last year showed that prospects do exist for companies looking to enter the market.
The report also shows that Asia Pacific will become the largest contract logistics market by 2016, due to economic weakness in Western Europe.DHL Supply Chain was able to force its way into that market through acquisition, but most global providers are prevented by entry barriers, especially in China and Japan.

To get around this problem, companies look to create national joint ventures and develop distribution centres, as well as cross-border services in South East Asia, to benefit from the growing intra-Asian trade.Cathy Roberson, the report’s author, said: “Despite a slowdown in market growth over the past two years, there are certainly opportunities for companies to develop market share, if they adopt the right strategy.

“For some providers, that will mean enhancing their service levels for certain vertical sectors, and for others it will mean following a carefully crafted acquisition strategy in new geographies.“However, with the global economy in the balance, it is now more important than ever to get the strategy right.”

Filed in: Logistics

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