Transportation and Logistics Market Insight Tool

The transportation and logistics industry is being reshaped by economic, political, and technological change—enough to prompt virtually every company to rethink its business model. BCG’s Transportation and Logistics Market Insight Tool enables transportation and logistics executives to analyze this complex, diverse industry at a glance:

Which business segments are growing fastest?
Which are most profitable?
How does your company stack up against competitors?

Why Does Your Shipping Business Need the Tool?

With our Transportation and Logistics Market Insight Tool, you can compare a wide range of data including:

Past financial performance for each market segment
Business-unit-level financials
Total geographic splits
Corporate details such as number of employees
Market size estimates
Segment prospects over the next four years

BCG enables you to understand the forces that generate growth and returns and how your own transportation and logistics segments compare with those of the competition. With the data from the Transportation and Logistics Market Insight Tool, you can design a strategy that optimizes your company’s own growth and profits.

What Does the Tool Deliver?

By gathering the most important data and displaying it in one place, BCG’s Transportation and Logistics Market Insight Tool provides a powerful cockpit for steering operational decisions across the entire transportation and logistics value chain.

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Within the tool, segments are categorized into four broad categories on the basis of asset intensity:

Logistics infrastructure comprises segments for which the management of infrastructure is the most important task.
Logistics services, or third-party logistics (known as 3PL), comprises three segments: road and rail freight forwarding, air and sea freight forwarding, and contract logistics. Managing capacity is their main focus.

Logistics advisory includes all fourth-party logistics services (4PL), such as consulting and IT services, for transport and transport-related businesses.
Logistics execution comprises segments that emphasize the management of equipment.

Key performance indicators include profit, revenue, EBIT, ROA, and global market share.

Samples of the Latest Tool Insights

BCG’s Transportation and Logistics Market Insight Tool can be used to gain a highly customized view of the segments most relevant to your business and strategy. Our analysis of the data uncovers several overarching trends.

How concentrated or fragmented are various segments? This overview shows that in transportation and logistics, the top ten companies control 84% of rail networks by revenue and 71% of postal delivery—but only 24% of contract logistics and only 2% of road freight.

What are the trends in fragmentation and consolidation? We observe a trend toward further market concentration among those segments operating within natural monopolies, such as rail and postal networks, due to the slow liberalization of these markets. Our analysis also highlights market concentration in air and sea freight forwarding as M&A rises.

Which sectors deliver the highest, lowest, and most-changed revenues and profits? This overview shows that logistics service providers have experienced the fastest growth.

Which companies are top performers in each segment? This overview shows that the top ten companies across the transportation and logistics industry have grown faster than their competitors over the past decade, posting a 1.7% compound annual growth rate, compared with a 1.5% CAGR for the industry as a whole.

Which transportation and logistics segments have the best growth prospects? Market segments vary dramatically in their ROA and growth prospects. The courier, express, and parcel (CEP) segment, for example, produced the industry’s highest average ROA during the 2014 to 2018 period and is projected to yield the highest CAGR in the 2019 to 2023 period. The postal segment, although closely related to CEP, produced the industry’s lowest ROA and is expected to report the lowest CAGR.

Which segments have the highest ROA? This overview shows that air cargo has achieved the greatest improvement in ROA since 2014, with a jump of 1.9 percentage points. Warehousing (logistics real estate and property) follows closely with a gain of 1.2 percentage points, fueled in part by solutions in intercontinental online trade and e-fulfillment. While most other market segments posted at least a modest improvement in ROA—including toll roads, hinterland and sea terminals, airports, and road and rail freight forwarding—some others saw their ROA erode.

What is the range of ROA performance in each segment? This overview drives home the point that even in the segments that had a weighted average ROA that was particularly low in the 2014 to 2018 period—postal, rail network, sea freight, and port authorities, for example—top performers posted healthy returns.

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