The demand for project logistics services is growing rapidly with the increasing growth of the global renewable energy sector and increasing investments in infrastructure projects. Managing freight with unusual dimensions is always challenging for a transporter. Larger-sized cargo necessitates using entirely different infrastructure, employees, and equipment. But shippers and service providers are increasingly skilled at transporting big and heavy items. According to a report by Mordor Intelligence, the global project logistics market is projected to register at a CAGR of more than 4.5% through the forecast period.
Energy & Mining Sector Expansion Driving the Growth of the Market:
Transporting large pieces of machinery and equipment is frequently required for the expansion of the energy sector, including projects involving oil and gas, renewable energy, and power generation. The demand for project logistics services is expanding because of increased energy consumption and the creation of new energy infrastructure. Additionally, the mobility of large and heavy machinery, such as trucks, excavators, and drilling equipment, is required for mining and resource extraction projects.
The demand for heavy cargo across numerous industries drives the need for specialized project logistics services. For instance, Megalift, which involves transporting heavy and oversized shipments, received a contract from General Electric to transport the world's largest and most efficient heavy-duty gas turbine. Megalift transported a massive General Electric 9HA.02 gas turbine to Malaysia from France to Pasir Gudang port, located in the southern region of the Malaysian Peninsular.
The demand from renewable energy projects and the transportation of wind turbine blades and components are expected to fuel the market for project logistics by generating demand for specialized logistics services to accommodate large-scale projects' complex and demanding needs.
Industrial Construction and Manufacturing:
The transportation and installation of large-scale industrial construction projects and manufacturing facilities are frequently necessary. The necessity to manage the logistical difficulties posed by these specialized goods leads to a demand for project logistics services. Heavy and enormous machinery, materials, and equipment are frequently transported as part of industrial building and manufacturing operations, which also often manage various logistical tasks like warehousing, customs clearing, and on-site logistics assistance. Many projects call for specialized knowledge and skills to ensure the effective and timely delivery of goods and materials to the project site.
Project logistic services are in high demand due to the growth of the industrial and construction sectors in various locations. For instance, China’s construction industry has significantly transformed in recent years. Since the announcement of the Belt and Road Initiative in 2013, Chinese contractors have undertaken and invested in a vast number of infrastructure projects. This presents a significant opportunity for regional project cargo companies to support those projects with logistics services in the coming years.
The globalization of industrial processes also boosted the demand for project logistics services. Companies need logistics partners with a global network and experience negotiating customs and regulatory processes as they set up industrial facilities and building projects in many nations.
Asia-Pacific Leads the Project Logistics Market:
According to a report by Mordor Intelligence, Asia-Pacific is predicted to grow at the quickest rate globally. The APAC region is home to some of the world's fastest-growing economies, such as China and India. These economies are investing heavily in infrastructure projects, driving the growth of the project logistics market in the region. The growth of the renewable energy sector also creates new opportunities for project logistics providers in the APAC region.
By 2025 and 2030, respectively, China and India want to boost renewable power capacity to more than half the total installed capacity. Indonesia plans to add 41 gigatons of capacity over the next decade, with renewable energy accounting for most of the built capacity for the first time. Vietnam plans to build 70 gigatons of capacity over the next decade, with renewables accounting for 36%-39% of that total. Similarly, Australia is also heavily investing in renewable energy projects. Some of the recent developments in the Australian project logistics space include:
- In December 2022, Qube Heavy Lift commenced work on the discharge and transportation of ACCIONA Energía’s MacIntyre Wind Farm Precinct componentry. This 1,026-MW project is located southwest of Warwick in Queensland and, once complete, will be one of the largest onshore wind farms in the world.
- In December 2022, renewable energy developer RES Australia reached a major milestone in the construction of the 180 MW Dulacca wind farm in Queensland’s southwest, with the installation of the last of the project’s 43 turbines – the components of which were loaded in China and shipped to the site by AAL Shipping.
- Between February and July 2022, AAL operated a series of shipments between China and Brisbane to transport heavy lift and project cargo components for the 181MW Dulacca Wind Farm. Employed by multiple global logistics companies, AAL’s shipments comprised all 43 Vestas wind turbines (towers and blades), transformers, electrical cables, and others, totaling nearly 375,000 freight tonnes (FRT) of cargo.
- Infrastructure investments have been a major factor in the recent economic growth of Asia-Pacific nations. While some nations intend to improve their internal infrastructure, the demand for project logistics services will increase significantly.
Key players in the Project Logistics Market:
Some key players in the global project logistics market include Bollore Logistics, Megalift, NMT Global Project Logistics, Rohlig Logistics, Rhenus Logistics, DHL, and Kuehne Nagel. The market is more competitive as the leading players seek acquisitions of specialized companies. The market is likely to become more specialized, with companies focusing on specific segments, such as energy, infrastructure, or manufacturing. This is because each segment has its unique requirements.
Due to the existence of both major international firms and local, medium-sized, and small players, the project logistics industry is widely known for needing to be more cohesive. While international players in project logistics have a significant presence and a specialized team to meet customer demands, local players are progressively improving their all-round capabilities, such as the industries they serve, the services they offer, the technology they use, and their innovative thinking, to compete with the international players.
With the fast growth in this space, many leading global players, such as Maersk, DHL, Kuehne Nagel, Hellmann Worldwide Logistics, and Expeditors, launched separate divisions for offering project logistics solutions.
Learn More
For more information about this fast-growing market, look at the Project Logistics market, a 250-page report with detailed insights on market trends, dynamics, segmentation, competitive landscape, and company profiles of key Project Logistics companies.
