Green Logistics Market By End Use, By Business Type, By Mode of Operation: Global Opportunity Analysis and Industry Forecast, 2023-2032

Executive Summary

The Green Logistics Market is expected to experience a significant growth rate of 8.3% from 2023 to 2032 owing to rise in environmental regulations and legislation.

Green logistics refers to a collection of sustainable policies and practices designed to diminish the environmental consequences associated with logistics operations. It encompasses various endeavors aimed at quantifying and minimizing the ecological impact generated by activities related to the movement of products, information, and services from the origin to the destination. The primary objective of green logistics is to enhance operational efficiency while prioritizing the sustainability of the organization. This entails initiatives such as reducing emissions, adopting more sustainable operational processes, and mitigating environmental pollution.

Green logistics focuses on optimizing transportation activities to reduce fuel consumption and emissions. This involves using more fuel-efficient vehicles, promoting modal shift (e.g., shifting from road transport to rail or water transport), implementing route optimization techniques. It also adopts alternative fuel technologies such as electric or hybrid vehicles and sustainable aviation fuel (SAF) for air transport.

Moreover, rapid urbanization across the world increased the demand for automobiles. The automotive sector is expanding rapidly to meet the rising need for faster shipment of goods. Moreover, automotive manufactures have adopted a green and economical logistic approach to minimize their carbon footprint. For instance, in November 2022, Ford joined Manufacture 2030, a digital platform that offers tools for measuring, managing, and mitigating carbon emissions across industries including manufacturing. By becoming part of this platform, Ford strengthens its commitment to achieving carbon neutrality by 2050. The company aims to decrease emissions not only from its operations but also from its tier suppliers and logistics services, aligning with its overarching goal. Through collaboration and the utilization of digital tools, Ford strives to make significant progress in reducing its carbon footprint throughout the supply chain. Improvement in the electric vehicle manufacturing process along with the advent of customized last mile delivery vehicles are expected to promote the growth of the automotive segment during the forecast period.

In addition, rise in bank branch network and widespread adoption of information technology are the major factors that influence the logistics market for banking & financial services segment. In addition, with rapid development of time & society, the finance and logistics industry form a close integration, resulting in innovation and development in baking & financial logistics services, which, in turn, boost the market growth. Governments banks supported green logistic development by providing loans to green logistic projects. For instance, in April 2023, the Commonwealth Bank of Australia (CBA) introduced a diverse lineup of green asset finance solutions. These offerings are designed to assist businesses in their pursuit of sustainable practices by facilitating investments in green vehicles, equipment, and machinery. New finance options by CBA empower businesses to make environmentally conscious choices while simultaneously driving economic growth and efficiency. Also, the growth in online retailing, direct-to-consumer sales, and online grocery shopping also fuel the growth of the logistics market for the banking & financial services segment.

Moreover, Roadways distribution logistics entails low capital investment as compared to other transportation such as rail and air transportation system. This leads to the establishment of new companies and boosts its presence in the market. In addition, surge in adoption of EV in logistics is anticipated to propel the green logistics market in the roadways distribution segment. Furthermore, the growing e-commerce industry coupled with increasing door-to-door delivery further influences the growth of the logistics market. Many logistics companies shift to electric vehicles to cut the carbon emission from their road transport. For instance, in December 2021 FedEx Corporation expanded its delivery fleet with 500 electric trucks from BrightDrop, a General Motors (GM) technology startup for green logistics and parcel delivery. Moreover, in March 3023, GEODIS expanded its fleet with Volvo Trucks fully electric trucks to distribute goods throughout Australia, including automotive replacement parts. In addition, in January 2023, FedEx Express, a division of FedEx Corporation, expanded the number of electric vehicles in its fleet by installing 30 TATA Ace EVs in India in support of its global transition to carbon-neutral operations by 2040. These developments are likely to boost the green logistics market in the roadways segment.

In addition, an increase in adoption of transportation management software has been observed. smart warehouses incorporate advanced technologies and automation systems to optimize warehouse operations and improve efficiency. Moreover, companies are increasingly focused on adopting eco-friendly practices, optimizing energy efficiency, implementing solar systems, proper waste management systems, and utilizing renewable materials. For instance, in May 2023, Mahindra Logistics Limited (MLL), the largest integrated logistics solutions provider in India, partnered with LOGOS, a prominent logistics specialist in the Asia Pacific region, and Venture partner Ivanhoe Cambridge, to convert India's largest warehousing facility into a net-zero energy park. This transformation expands MLL portfolio of renewable-powered warehouses to over 4 million square feet across the country. The facility now features a massive 500 kW rooftop solar panel installation. This initiative is equivalent to planting 3,500 trees and underscores MLL commitment to sustainable practices and environmental stewardship.

The green logistics market is segmented into end use, business type, mode of operation and region. On the basis of end use, it is segregated into military commercial, and UAV. On the basis of technology, it is fragmented into healthcare, manufacturing, automotive, banking and financial services, retail and e-commerce, and others. On the basis of business type, the market is categorized into warehouse, distribution, and value added services. On the basis of mode of operation, the market is categorized into storage, roadways distribution, seaways distribution, and others. On the basis of region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

North America is a prominent region in the green logistics market, comprising the U.S., Canada, and Mexico. The region has been witnessing a growing emphasis on sustainable practices, driven by environmental regulations and the increasing awareness of carbon footprint reduction. The U.S. leads the green logistics market in North America due to its large economy and advanced transportation infrastructure. U.S. based private logistic companies have invested in sustainable logistic project. For instance, in March 2021, FedEx Corporation announced that it invested $2 billion to achieve carbon-neutral operations by 2040. The first investments are projected to be made in fleet electrification, carbon separation, and renewable energy.

Canada has also made significant strides in adopting green logistics practices, with a focus on alternative fuels and efficient supply chain management. For instance, in November 2022, Air Canada made an announcement regarding Bolloré Logistics, becoming the inaugural Air Canada Cargo customer to participate in the Leave Less Travel Program. This program provides corporate and cargo customers with viable choices to mitigate or minimize their greenhouse gas (GHG) emissions linked to business travel or freight transportation, thereby reducing their carbon impact. Bolloré Logistics has made a commitment to offset a substantial portion of its projected GHG emissions resulting from its shipments with Air Canada Cargo by utilizing sustainable aviation fuel (SAF). This commitment translates to the purchase of 620,000 liters of SAF in 2022. Mexico, although still developing its green logistics sector, has investing in renewable energy sources and sustainable transportation solution.

Key players profiled in the green logistics market report include FedEx Corporation, DSV, Agility Public Warehousing Company K.S.C.P. and Subsidiaries, GEODIS, Deutsche Post DHL Group., YUSEN LOGISTICS CO., LTD., Bollor SE, CEVA Logistics, XPO Logistics, Inc., and United Parcel Service of America, Inc. The leading companies adopt strategies such as partnership, agreement, acquisition, expansion and collaboration to strengthen their market position. For instance, in March 2023, GEODIS expanded its fleet with Volvo Trucks fully electric trucks to distribute goods throughout Australia, including automotive replacement parts.

Key Market Insights

• By end use, the manufacturing segment was the highest revenue contributor to the market, with $383.41 billion in 2022, and is estimated to reach $817.09 billion by 2032, with a CAGR of 7.7%.
• By business type, the distribution segment was the highest revenue contributor to the market, with $732.44 billion in 2022, and is estimated to reach $1701.45 billion by 2032, with a CAGR of 8.6%.
• By mode of operation, the storage segment dominated the global market, and is estimated to reach $451.08 billion by 2032, with a CAGR of 7.6%. However, the seaways distribution segment is expected to be the fastest growing segment with a CAGR of 9.2% during the forecast period.
• Based on region, Asia-Pacific was the highest revenue contributor, accounting for $429.1 billion in 2022, and is estimated to reach $1124.93 billion by 2032, with a CAGR of 9.9%.

Companies Mentioned

• Agility Public Warehousing Company K.S.C.P. and Subsidiaries
• Bollor SE
• CEVA Logistics
• Deutsche Post DHL Group.
• DSV
• FedEx Corporation
• GEODIS
• United Parcel Service of America, Inc.
• XPO Logistics, Inc.
• YUSEN LOGISTICS CO., LTD.

Methodology

The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.

They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.

They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:

• Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
• Scientific and technical writings for product information and related preemptions
• Regional government and statistical databases for macro analysis
• Authentic news articles and other related releases for market evaluation
• Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast

Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.