Global Logistics and Freight Market: Importance, Challenges, and the Impact of E-commerce

Have you ever thought about how a product manufactured somewhere on the other side of the globe can be in your hands just a few days later?

A seamless global logistics system is the answer to this question.

Global logistics make it possible for any goods, be they electronics or fresh fruit, to be available when you need them.

Flawless at first sight, global logistics are actually complex and challenging due to a volatile mix of factors that are often hard to control. Read our article to learn about the evolution of the global logistics market since the first-ever online deal recorded in 1994 up until the present day.

Understanding the global logistics and freight market landscape

Global logistics involves the efficient and optimized coordination of the movement of products, information, and resources from their point of origin to their destination and back again if necessary.

Looking at the global logistics and freight market, we must analyze a massive, complex trillion-dollar market where goods are handled across the world.

It involves handling complex cross-border supply chains with the key components being:

• Information technology systems for tracking and coordination
• Transportation (ocean, air, road, and rail)
• Inventory management
• Warehousing and storage
• Material handling
• Packaging and distribution

Market size

Different sources provide different data regarding the size of the logistics market but, if the numbers are generalized, it amounts to roughly US$9-10 trillion when the entire broad logistics and transportation industry is assessed. The market is expanding and growth projections are around a compound annual growth rate of 8-9%.

Estimates of market size can vary across various sources for several reasons – some only take into account freight forwarding, while others include warehousing, last-mile delivery, and supply chain software. However, the estimates of three different research units fall into a similar range:

• Market Growth Reports states that the global logistics market was valued at US$9.98 trillion in 2024.
• According to Markets and Markets, the value of the market in 2024 was US$9.4 trillion.
• Transparency Market Research, in turn, indicates a value of US$9.3 trillion in 2024

Deal activity among logistics players

According to a McKinsey study, deal activity such as mergers and acquisitions among logistics businesses is increasing, with a total deal value of US$98 billion recorded in 2024, up from US$70 billion in 2020, yet still below the US$150 billion figure registered in 2021.

The study shows that 91% of all the deals carried out in 2024 were of relatively low value (less than US$1 billion), with just a handful of mega deals reported.

Logistics by mode of transport

By moving, storing, and shipping items via B2B, B2C, or C2C supply chain networks, the logistics industry promotes trade and entrepreneurial endeavors between parties.

The table below shows the modes of transport involved in logistics:

What are the functions of global logistics?

There are several activities undertaken by global logistics companies that drive international trade, including:

• Transportation and distribution of products via air, sea, rail, and road with a guarantee of fast and efficient delivery
• Customs clearance by handling the necessary paperwork and fees for customs, making the import and export procedure for companies simpler, and offering consulting services for customs compliance
• Storage and warehousing encompass safe storage solutions together with inventory administration services
• Supply chain management, from obtaining raw materials to shipping the finished product to clients

What is the importance of global logistics?

Without a doubt, global logistics represents the backbone of today’s world economy, and there are several reasons to back this claim.

1. Assisting global trade and economies

Logistics facilitate the movement of goods across borders, contribute to GDP growth, create jobs, and allow countries to concentrate on their areas of economic advantage.

2. Improving supply chains

Global logistics is a ‘thread’ that connects manufacturers, suppliers, and consumers worldwide, which in turn improves efficiency via optimized transportation, warehousing, and distribution networks.

3. Increasing market reach

Companies of various sizes benefit from access to international markets. Even a small manufacturer in the Asia-Pacific region can market its products in the European Union and vice versa, thanks to the logistics infrastructure.

4. Better choices and prices for consumers

When logistics operate efficiently, this stimulates competition leading to fair prices for consumers, expands product variety, and accelerates delivery speeds – exactly what modern consumers are looking for.

5. Humanitarian and emergency response

Disasters, conflicts, and health crises demand a safe and efficient logistics infrastructure for the timely delivery of food, medicine, and supplies to people in need.

6. Technology and innovation

Logistics innovations in tracking, automation, artificial intelligence, and data analytics extend their benefits beyond the industry itself, enhancing transparency and reducing waste across supply chains.

The impact of e-commerce on global logistics

Online shopping has had a significant impact on the way freight moves.

In 2024, according to Forbes, global e-commerce reached a value of US$6.3 trillion, which is automatically reflected by:

1. An increase in shipments
2. Faster delivery expectations
3. Carriers struggling to keep up

The global logistics market moved over 45 billion tons of cargo in 2024, according to Market Growth Reports, and e-commerce was responsible for an impressive 36% of all parcel volumes.

What was the first product ever sold online?

Did you know that the first ever product bought online using a secured payment protocol (via Pretty Good Privacy (PGP) encryption) was a CD of Sting’s Ten Summoner’s Tales album? The deal was recorded on August 11, 1994, when a 21-year-old entrepreneur Dan Kohn sold a CD to a friend using his website, NetMarket. The CD’s price was US$12.48 (plus shipping).

In 1995, the first intercontinental and cross-border deliveries of products purchased using e-commerce platforms were recorded, featuring Amazon and eBay.

E-commerce and air freight

E-commerce growth also led to an increase of 11.3% in the demand for air freight worldwide in 2024, according to Cargoson.

Today, e-commerce accounts for over 50% of all air cargo from Asia, the highest yearly increase the industry has ever witnessed.

E-commerce and last-mile delivery

Last-mile delivery is the most expensive and slowest part of the entire chain, and e-commerce continues to make it so. Here’s why:

• Returns – volumes are high, margins are thin, and the logistics of reverse shipping (returns from customers) rarely receive the same attention as outbound goods
• Same-day delivery – customers expect this, which means the infrastructure has to catch up.
• Product variety – the more various product lines a store sells, the harder it becomes to organize, pack, and ship them.

Logistics growth analysis by region

Asia-Pacific runs this market

In 2024, the global logistics share of this region was 44.3%, driven by strong manufacturing, rising trade volumes, e-commerce growth, and infrastructure development.

The logistics market of the Asia-Pacific region hit a value of around US$4.56 trillion in 2024, prompted by rapid e-commerce growth as well as improvements in supply chain technology.

Experts predict that by 2034, the market will reach a value of US$8.28 trillion.

Its Belt and Road rail routes witnessed cargo volumes increase by 18% in 2023, according to Market Data Forecast.

*The Belt and Road Initiative (BRI) rail network is a key component of China's infrastructure project to establish a connection between Asia, Europe, and Africa via extensive, mostly Chinese-funded land routes.

North America is second, but in a different weight class

The U.S. logistics market hit US$2.58 trillion in 2024, according to Inside Logistics, driven, among other factors, by e-commerce.

The U.S. e-commerce market is the world's second-largest, worth more than US$1.4 trillion in 2025, with online sales making up approximately 20% of all retail transactions.

E-commerce has dramatically reshaped freight demand, accelerating investment in warehousing, last-mile delivery, and automation.

EU focuses on green logistics

The European region is home to major ports such as Rotterdam and Antwerp, extensive rail corridors that connect to Asia, and key air freight hubs in Frankfurt and Amsterdam.

Germany had the most freight transported by road in 2024, according to Eurostat.

But the sector faces challenges such as port congestion, trucking labor shortages, geopolitical disruptions, and increasing pressure to decarbonize.

The Middle East and Africa (MEA)

Due to increasing commercial activity, investment in infrastructure, and the region's strategic location between important international markets (Asia, Europe, and Africa), the MEA logistics market is already large and continues to grow.

The major drivers of the growth in the MEA include investments in ports, airports, railways, and logistic hubs.

Road transport still dominates, but e-commerce and cross-border trade are leading to marine freight and express parcel services rapidly increasing.

The Red Sea/Suez disruption

Key challenges remain across the region such as infrastructure gaps between African nations, complex customs procedures, and, most critically, the ongoing Red Sea and Suez Canal crisis fueled by strikes by the Houthi rebels in Yemen.

This disruption has emerged as the greatest threat to regional maritime logistics, with shipping volumes in the corridor being well below pre-crisis levels and no clear timeframe for a return to a more normal state.

Major players influencing the logistics industry

This list focuses on the Third-Party Logistics (3PL) segment, which encompasses transportation management, warehousing, distribution, and supply chain solutions.

Many global industry leaders, including DHL Supply Chain, Kuehne+Nagel, DSV, and DB Schenker, operate mainly in this segment.

Ranking companies by gross logistics revenue/turnover in 3PL offers a clearer picture of those that play the largest role in managing global supply chains.

Technological advances shaping the future of global logistics

Logistics companies rank GenAI among the highest innovation priorities and believe it has the potential to transform operations.

However, as the Boston Consulting Group (BCG) outlines, only 10% of providers have started to use GenAI to help to deal with the market disruptions of today.

The graph below shows data based on a survey of logistics industry leaders:

So ultimately, what does all this mean?

1. Regional providers are the most enthusiastic, with 57% identifying GenAI as their top potential disruptor, although few have started to adopt it.
2. Global players are more cautious, giving structural and geopolitical risks priority over new technologies.
3. 3PLs are often the most advanced in terms of digital adoption, although their use of GenAI is still in its infancy.
4. Carriers continue to prioritize automation and internal efficiency above AI, even when they cite GenAI as a major future factor.
5. Shippers are pushing for increased visibility and digitization in logistics operations, but specific goals vary depending on a company’s profile.

Small shippers focus more on faster communication and better transparency into the activities of logistics providers.

Medium-sized shippers maintain a balanced set of priorities.

Large shippers, with advanced networks and automation goals, prioritize broader digitization initiatives.

Sustainability initiatives in global logistics

About 40% of those questioned in a recent survey by BCG responded that environmental regulation is among their top concerns.

The catch is that many have done little about this with sustainability not being built into how they sell services or make investment decisions.

• Only 12% of European providers and just 7% in North America believe sustainability will meaningfully disrupt the industry in the next few years.

Shippers are a separate issue.

They often talk about sustainability goals, but when procurement decisions are made, the criteria that actually move the needle are cost, reliability, and whether the shipment can be tracked.

Challenges facing the global freight market

The last few years have been difficult for shippers, logistics providers, transporters, and third-party logistics companies.

There are five conclusions reached by the BCG survey that in our opinion define the major challenges of global logistics:

1. Almost 80% of shippers state that their major issue is higher costs from tariffs and duties.
2. Almost 70% of shippers first look to cut shipping costs and engage in contract renegotiation.
3. 44% of logistics companies report geopolitical uncertainty as their major challenge.
4. Logistics firms see GenAI as the most influential force in the industry, despite only one in every ten respondents having used it.
5. Even though European carriers continue to pitch green freight options, most shippers make their choices based on price.

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