Increased outsourcing of the logistics function has aided the sector over the past five years
Melbourne, Australia (PRWEB) January 13, 2015
The Integrated Logistics sector provides door-to-door transport, storage and distribution services. It includes transport operators such as trucking and railroad companies, storage facilities, freight forwarders, customs brokers and infrastructure operators. Over the five years through 2014-15, sector revenue is forecast to grow at an annualised 4.2%, to reach $102.7 billion. Growing demand from major markets has driven this growth. In 2009-10, the sector's performance stagnated as the weak domestic economy caused retailers, wholesalers and manufacturers to cut orders of new stock and run down inventories. This resulted in a decline in imports and falling demand for trucking and warehouses. The sector has since recovered, with sector revenue expected to grow by 3.4% in 2014-15. According to IBISWorld industry analyst Stephen Gargano, “The strong growth in the sector over the past five years has been supported by the implementation of automation and tracking technology across the supply chain, which has increased the potential for economies of scale and scope.” Increased outsourcing of the logistics function has also aided the sector over the past five years.
Competitive forces will place further pressure on individual sector participants over the next five years, resulting in a fall in enterprise numbers. With increased investment required to keep pace with market expectations, larger players have been more successful at adapting their operations. “Efficiency gains are forecast to remain central to the sector's performance over the next five years,” says Gargano. Technological developments will be a key driver of sector growth, with stock tracking and monitoring, GPS location, voice-picking and increased automation expected to improve productivity and help the seamless flow of stock through the supply chain.
The Integrated Logistics sector is characterised by low market share concentration. Concentration varies between segments, according to factors such as capital intensity and barriers to entry. Concentration within the sector has increased over the past five years, as major players increased the scale of their operations. Large operators, with related economies of scale, have proved resilient against the mixed economic conditions following the global financial crisis. Integrated logistics companies are typically large due to costs associated with network integration systems. Companies such as Toll Holdings and Linfox dominate the sector, with self-employed truck drivers at the other end of the spectrum. These large companies generate billions per year from the provision of integrated logistics and have become dominant market powers. These companies drive market share trends and technology adoption within the sector.
For more information, visit IBISWorld’s Integrated Logistics industry in Australia report page.
Companies in this sector provide logistics, transport, storage, handling, distribution and other support services to transport companies as part of third-party vertically integrated supply networks.
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