North America Automotive Logistics Market is Anticipated to Witness High Growth Owing to Increasing Automotive Production
The North America automotive logistics market plays a significant role in the transportation and distribution of automobile components as well as finished vehicles. Automotive logistics manages the flow of vehicle parts, supplies, and inventory throughout the automotive supply chain. It also handles the transportation of completed vehicles from the point of manufacture to dealerships. The growing automotive production in North America owing to the rising demand for vehicles is fueling the need for efficient automotive logistics services. Growing international trade activities have also increased the outsourcing of logistics operations to third-party logistics (3PL) providers by automakers and suppliers.
The North America automotive logistics market was valued at US$ 66.37 Bn in 2021 and is forecast to reach a value of US$ 113.69 Bn by 2030 at a CAGR of 6.1% between 2022 and 2030.
Key Takeaways
Key players operating in the North America automotive logistics are Ceva Logistics Ag, Kuehne + Nagel International Ag, Dhl International Gmbh (Deutsche Post Ag), Ryder System, Inc., United Parcel Service, Inc., Db Schenker (Deutsche Bahn Ag), Xpo Logistics, Inc., Dsv A/S, Nippon Express Co., Ltd. and Geodis. Ceva Logistics AG is the key player providing end-to-end supply chain solutions including transportation, warehousing, and final mile delivery.
The key opportunities in the North America Automotive Logistics Market Demand are increasing use of advanced technologies like IoT, automation, big data analytics and AI to improve operations visibility, efficiency and reduce costs. Warehousing digitization using robotics and automation is another opportunity area.
Major automakers are aggressively expanding their operations in North America to cater to the growing demand. Global logistics players are also expanding their network and service capabilities to offer tailored solutions. For instance, Geodis inaugurated a new logistics center in Texas in 2022 to serve automotive customers.
Market Drivers
Growing vehicle production in North America fueled by strong economic growth and rising disposable incomes is a major driver. Increasing inclination of OEMs towards outsourcing non-core logistics operations to 3PL partners is boosting market revenues. Efforts by logistics players to offer value-added services like cross-docking and sequencing are enhancing customer experience. Government initiatives to promote investments in transportation infrastructure are expected to improve efficiencies further.
Market Restrains
Volatility in oil prices poses challenges related to fluctuating fuel costs. Server supply chain disruptions due to Covid pandemic and semiconductor shortage impacted delivery of components. There is a lack of skilled workforce and drivers is another concern area for logistics players. Environmental regulations limiting carbon emissions present challenges to reduce carbon footprint for the industry.
Segment Analysis
The North America automotive logistics market is dominated by transportation sub segment. Transportation of vehicles from manufacturing plants to dealerships plays a crucial role in automotive logistics. An efficient transportation network is required to ensure just-in-time deliveries of vehicles. This helps automakers to avoid inventory costs and maintain optimal stock levels. Many warehousing and value-added services are also integrated with transportation of vehicles. The requirement of moving thousands of vehicles every month makes transportation the largest segment in this market.
Global Analysis
Regionally, the United States holds the major share of the North America Automotive Logistics Market Regional Analysis. Large automotive production combined with a well-established sales and distribution network across the country makes the US the dominating regional market. Canada is also growing at a considerable rate driven by increased vehicle manufacturing and cross-border trade with the US.
Mexico has emerged as an important manufacturing hub for automotive companies. Growing vehicle exports from Mexico is propelling the demand for efficient logistics in the country. Rising automotive production in Mexico encourages international logistics players to expand their footprint in the region.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)