Market Trends of asia pacific freight and logistics Industry
Asia Pacific freight demands driven by global seaborne trade, which is triggering transport sector investments
- The region's new Regional Action Program (RAP) addresses issues like increasing freight and passenger volumes and reflecting the rising freight transport and mobility demand. Two-thirds of global seaborne trade is concentrated in Asia Pacific, also home to nine of the world's busiest container ports. The region is responsible for more than 40% of the global surface freight transport flows, and by 2050, the region's demand for freight transport is projected to triple.
- India's transportation sector, primarily road-dominated, contributes about 3.75% to the GDP. Over 50% of freight and 90% of passenger traffic rely on roads, driven by government and private investments, rising exports, the FMCG sector, and growing disposable income. India promotes connectivity with 100% FDI in the roads and highway sector. Japan's FY 2021 saw increased domestic freight transportation by commercial motor vehicles, totaling about 2.6 billion metric tons, with road transport leading in volume.
- International freight transport continued to operate with the support of policy measures. In the Asia Pacific region, networks like the Asian Highway, Trans-Asian Railway, and dry ports, established under ESCAP, play a vital role in land transport connectivity and logistics. These networks are increasingly integrated with inter-regional transport corridors and shipping networks. China emphasized ensuring smooth transportation and logistics to stabilize the economy, with the Industrial and Commercial Bank of China's Shandong branch extending over USD 1.19 billion in loans to support the logistics sector in 2022.
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Owing to global uncertainties, crude oil prices are soaring in the Asian economies as most of them are net oil importers
- In September 2023, oil prices hit a 10-month high of nearly USD 90 per barrel as Saudi Arabia and Russia extended their voluntary production and export cuts until the end of 2023. As India imports 85% of its oil, the fuel prices were impacted. According to the All-India Motor Transport Congress, which represents more than 14 million truckers and bus and tourist vehicle operators, the soaring fuel prices are impacting India's truckers as they have limited ability to pass on the rising prices, which account for 70% of the cost of operating a truck.
- Crude oil reached USD 130 per barrel in March 2022, its highest level since 2008, before retreating to USD 100 per barrel in April of the same year. Russia is the third-largest producer of liquid fuels and petroleum, so when the country invaded Ukraine in late February 2022, it immediately impacted crude oil prices. As the conflict continued, the prices of crude oil settled on an upward trajectory. The increase in oil price also reflects supply limitations by OPEC. Though the overall economic impact has been modest in Asia-Pacific, the situation can change quickly, subject to the magnitude and duration of oil price increases.
- Due to global geopolitical uncertainties and tight supply conditions, oil prices surpassed USD 80 in November 2021, double the price in 2020. Countries in Asia rely on coal to generate power, but shortages have turned them into natural gas. Due to high demand, natural gas prices soared in 2021 and remained high in 2022, and affected countries have switched from gas to oil to reduce power generation costs. Higher oil prices are often economically damaging for net oil importers. Most countries are net oil importers except for a few oil exporters, such as Brunei, Malaysia, and Vietnam.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- The diverse population of 4.7 billion in Asia Pacific in 2023 faces a decline due to aging demographics
- Oil and gas and wholesale and retail trade sectors are the fastest-growing sectors contributing to economic growth in APAC countries
- China is the leading e-commerce market, accounting for over 50% of all retail e-commerce sales worldwide
- Asia Pacific economies are striving toward robust export growth by 2030, driven by government initiatives to boost trade
- Rising fuel prices, along with global semiconductors shortages, increase overall operational costs
- The Asia Pacific region is investing in transportation infrastructure to boost its connectivity and business opportunities
- Supportive trade policies and initiatives, coupled with investments, are driving growth in the region
- Japan, South Korea, Malaysia, Singapore, and China are the main bilateral maritime partners driving connectivity in the APAC region
- Price fluctuations were witnessed across various modes of transport due to the introduction of new container vessels and the Russia-Ukraine War
- Asian countries are boosting investments in economic and infrastructure development
- India and China among the leading nations to boost agriculture, fishing, and forestry as economic drivers in APAC
- India, Australia, and Japan witnessed record high and fastest annual producer and consumer price increases in 2022, largely owing to high energy and utilities cost
- The GVA of the manufacturing industry in the region grew by over 5% YoY in 2022
- Asia Pacific economies are registering huge growth in LNG imports, driven by scarce domestic production
- Electric trucks are driving the road transport market in the APAC region as many countries are adopting net zero emission standards
- Prominent players in the region are primarily focusing on new product launches to expand their market share
- China became the world's largest maritime fleet owner in 2023, whereas Japan's shipbuilding declined by 16.4% amid rising costs in 2022
- Ports in Asia-Pacific battling port congestion, led by strikes and supply chain disruptions
- The volume of goods transported is expected to grow during the forecast period, owing to growing initiatives to support the increasing demand in the region
