Automotive Logistics Market Report

Technological advancements in the fields of IoT, AI, and blockchain are boosting automotive logistics and offering improvements in efficiency throughout supply chains. IoT enables real-time tracking of vehicles and components, and communication of the data can enhance decision-making and better use of assets. AI uses machine learning to enhance routing, predict demand, and handle inventory, which will proactively identify jams and reduce operational costs. The blockchain allows for a safe, transparent ledger of parts from suppliers to manufacturers, creating authenticity and compliance.

Processes get streamlined using smart contracts, and together, these technologies significantly enhance supply chain resilience and agility, making it possible for logistics companies to react very quickly to changes in the market. Also, one of the major driving factors for the automotive logistic market is the aftermarket services. As the number of consumptions of cars is increasing the aftermarket services are expected to rise at the same pace. Automotive logistics plays a key role in making sure that all the spare parts are available on time and easily at various places which reduces vehicle downtime and allows quick repairs. Also, the expansion of online automotive parts shopping drives the demand for effective transportation services. 

Fluctuations in fuel prices can significantly impact logistics costs, requiring better fuel management strategies. In most cases, manufacturers take escalated costs in the form of increased prices from consumers for vehicles which increases the overall cost. Suppliers would also look for a better alternative as an organization would look more towards procuring the same products locally to save cost, which can affect transportation. Higher prices for fuel may lead to lowered consumer spending, and manufacturers might get into intense competition with each other where a strong supply chain will be needed to hold a strong position in the markets.

Along with the transportation cost the shortage of drivers is also considered as a major problem. The trend in the decreasing number of drivers is been noticed in countries such as Germany, the United States, Canada, etc. Thus, the increase in production and decrease in drivers is considered a huge problem. As per the data of the German Freight Forwarding and Logistics Association (DSLV) in Germany, it is seen that on average 30,000 drivers retire every year and as a replacement only 2000 drivers are available similarly as per the data of the American Trucking Association there is a shortage of more than 60,000 qualified drivers. 

In February 2024, Miami-based freight transportation and logistics services provider Ryder System Inc. announced that it had acquired Concord, NC-based Cardinal Logistics, a provider of freight transportation and logistics services. The purchase price for the transaction was not disclosed. Ryder officials said that bringing Cardinal into the fold would help enable the company’s growth and also further strengthen its position as a leading customized North American-based dedicated contract carrier. Cardinal’s service offerings were comprised of providing dedicated fleets and professional drivers to service complex route structures across distribution centers, suppliers, and stores, as well as complementary freight brokerage services; and, to a lesser extent, last-mile delivery and contract logistics services. Cardinal primarily served consumer-packaged goods, omnichannel, grocery, building products, automotive, and industrial verticals.

In July 2023, Penske Truck Leasing announced that it had completed the acquisitions of Star Truck Rentals, Inc., a transportation services company offering full-service leasing, commercial truck rental, contract maintenance, used truck sales, and additional services, and Kris-Way Truck Leasing, Inc., a transportation services company offering full-service leasing, commercial truck rental, contract maintenance, and dedicated contract carriage. The acquisition of Star Truck Rentals, Inc. increased Penske's existing fleet by approximately 1,900 vehicles and added 18 locations throughout Michigan and Indiana. The acquisition of Kris-Way Truck Leasing, Inc. increased Penske's existing fleet by approximately 900 vehicles and added seven locations throughout Maine and New Hampshire. Penske has now integrated the facilities, staff, vehicles, and processes of both companies into its existing network.

Europe can be considered a lucrative market due to the number of vehicles per 1,000 inhabitants. As per the data of the Association des Constructeurs Européens d'Automobiles, the EU on average amounts to 567 passengers per 1,000, from which Luxembourg is ranked one for having the highest car density, which sums to 698 per 1,000 people. Thus, the European Union can be considered a lucrative market. Asia Pacific can also be considered a lucrative market due to the rising number of foreign trade agreements. Foreign trade agreements boost the automotive logistics market by reducing tariffs and trade barriers, facilitating smoother cross-border transactions.

This results in a rise in imports and exports and enhances market access for automotive manufacturers and suppliers. As per the data of the Asia Regional Integration Centre, Singapore has signed the highest number of foreign trade agreements, which is summed at 51, followed by China, which has 48 FTA, and India, which has 46 FTA. As all the top three countries with major signed FTAs belong to the Asia Pacific region, it makes the automotive logistics market lucrative and promising in Asia Pacific.