Australian logistics and warehousing market to reach $187 billion by 2021

money

Australia’s warehousing and logistics industries will be worth $187 billion by 2021, according to a new study from market research firm Ken Research.

The company noted that it has observed an evolution in the logistics industry in recent years, in terms of integration and digitalisation of the supply chain, which has led to better productivity and efficiency creating sustainable modes of transporting goods from one place to another.

Ken Research attributed the Australian logistics market’s impressive growth rate in 2016 to the expanding manufacturing and retail sector, the growing number of foreign companies and the increasing value of exports and imports.

The demand for cold chain logistics has grown with the rising demand for Australia agricultural products from other countries leading to increasing agricultural exports, the company noted. It added that government investment in infrastructure development of road, rail, air and water transport facilities will drive the Australia logistics and warehousing industry in coming years, through investment including $70 billion allocated for transport infrastructure from 2014 to 2021, and $75 billion for funding road and rail infrastructure from 2018 to 2027.

The partnership of the Australian Government with New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, Northern Territory and the Australian Capital Territory in 2014 is expected to assist the various land transport infrastructure projects.

Ken Research said that the freight forwarding industry will continue to account for the larger share of the revenue pie, supported by the growth of third-party logistics (3PL) service providers, as global players enter the Australian market.

Large companies are expected to focus on value-added services, with the power having shifted to the consumer, with internet driving growth, the transformation of supply chain, business-to-consumer (B2C) outgrowing business-to-business (B2B), new technology and home delivery.

“The value added services segment has seen faster growth in the international market than domestic primarily due to growing cross border e-commerce,” the company said. “With the development of artificial intelligence and growth of e-commerce sector, the demand for warehousing is expected to develop with auto and ancillary and chemical and pharmaceutical sectors [emerging as the] largest demand drivers of warehousing space.”