CHEMICAL LOGISTICS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

Global chemical logistics market is estimated to be valued at US$ 282.36 Bn in 2024 and is expected to reach US$ 397.48 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 5% from 2024 to 2031.

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Growing demand for chemicals from end-use industries such as healthcare, pharmaceuticals, food processing and others is expected to boost the need for effective logistics services. Moreover, implementation of advanced technologies in logistics operations, increased offshore chemical production and international trade agreements can boost demand for chemical logistics. Adoption of industry 4.0, IoT solutions, and automation  can make the logistics operations more efficient. However, high operational costs and lack of trained workforce can hamper the market growth.

Rising Demand for Processed and Packaged Food

Growing global population is expected to boost demand for processed and packaged food products. Chemicals play a very important role in the manufacturing, processing, and packaging of various food items. A wide range of chemicals are used as preservatives, colorants, flavoring agents, and other additives in order to increase the shelf life of food products and provide taste and consistency. Busy lifestyles of people can boost the consumption of packaged food that can be prepared and consumed quickly. The food processing industry relies heavily on a well-functioning chemical logistics network to efficiently manage the storage and transportation of essential chemicals, ensuring the smooth operation of its production processes. As food companies expand their operations globally and enter new international markets to cater to growing demand, these require sophisticated supply chain management and logistics services to deliver chemicals and raw materials on time. Ensuring an uninterrupted supply of various food-grade chemicals to manufacturers through a reliable logistics system is critical for the food industry to sustain its future growth trajectory.

For instance, In December 2022, Quantix, a leading supply chain services company to the chemical industry and a portfolio business of Wind Point Partners, acquired Mid-States Packaging, a full-service dry bulk transportation, warehousing, and export services provider with 11 locations across Texas, the Northeast, and the Mid-Atlantic. This acquisition enhanced Quantix's regional presence and expanded its warehouse and trucking transportation capabilities.

Market Concentration and Competitive Landscape

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Growth of the Personal Care and Cosmetics Sector

Personal care and cosmetics industry has witnessed growth due to increasing spending power, evolving beauty standards, and rising aspiration among the middle class in developing nations. A diverse range of chemicals is utilized in the production of skincare, hair care, color cosmetics, fragrances, and other personal care products. These chemicals include preservatives, emulsifiers, solvents, pigments, and functional chemicals, which are essential for the manufacturing process. As new products are continuously being developed to meet dynamic consumer demands, companies require flexible logistics partners who can efficiently handle complex international trade lanes. Rising e-commerce channels have enabled personal care brands to reach new global markets. This places tremendous pressure on their supply networks to deliver small orders across vast geographical locations without any delays. A responsive chemical logistics infrastructure assumes strategic significance for personal care players looking to capitalize on the exponential growth opportunities.

Key Takeaways from Analyst:

Global chemical logistics market growth is driven by increasing offshore chemical production and need for just-in-time delivery. Growing chemical trade between Asia and North America/Europe also necessitate efficient logistics networks. Chemical companies are outsourcing their distribution to third-party logistic providers to achieve economies of scale and focus on their core businesses.

The transportation of hazardous chemicals is hindered by regulatory compliance challenges, including strict requirements for labeling, packaging, storage, and documentation. Additionally, a shortage of trained drivers qualified to transport chemicals can further restrain market growth.

North America region dominate the market. Rapid industrialization and growing key end-use industries such as automotive, consumer goods and healthcare boosts demand for chemicals. Moreover, foreign manufacturers are setting up production bases in the region to cater to large domestic chemical logistics markets. This can boost demand for domestic and international chemical shipments.

Market Challenges: Complexity and risks associated with transporting hazardous chemicals

Complexity and risks associated with transporting hazardous chemicals can hamper the global chemical logistics market growth. The intricacies involved in the transportation of hazardous chemicals are numerous, making it a challenging task for logistics providers. These chemicals require specialized handling, storage, and transportation conditions to ensure safety and compliance with regulations.

One of the primary risks associated with transporting hazardous chemicals is the potential for accidents, which can lead to severe consequences such as environmental damage, injuries, or even fatalities.

Market Opportunities: Growing demand for sustainable and eco-friendly logistics solutions in the chemical industry

The chemical industry is one of the largest contributors to global greenhouse gas emissions, with logistics activities being a significant portion of this total. There is a growing demand for sustainable and eco-friendly logistics solutions in the chemical industry  due to increasing environmental consciousness and regulatory pressures. Increasing focus on reducing carbon emissions in the chemical industry can boost demand.

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Insights by Service, Transportation & Distribution dominates the market due to reliance on cost-effective transportation

By service, transportation & distribution segment is estimated to contribute the highest market share of 45.6% in 2024. Moving chemicals typically involves bulk shipments across long distances, thus, making transportation a major cost factor. Companies prioritize service providers that offer sustainable and scalable transportation networks to deliver raw materials and finished goods internationally. The globalization of trade has expanded markets but also increased transportation requirements, thus, boosting demand for multimodal carrier expert in chemical handling. Moreover, strict regulations on chemical transportation necessitate experienced operators with safety compliance programs. Transporters equipped to navigate complex documentation add value. As production facilities become more diffuse worldwide to optimize supply chains, transportation services are used to link manufacturing and consumer bases efficiently.

Insights by Mode of Transportation, Roadways dominates the market, owing to need for specialized storage

By mode of transportation, roadways segment is estimated to contribute the highest market share of 45.1% in 2024. Chemicals pose unique handling challenges like reactivity risks, temperature/humidity controls or specific packaging needs. Thus, chemical companies prioritize reliable warehousing providers with equipment and facilities tailored for chemicals. For example, containers, tanks and silos must utilize appropriate materials of construction and incorporate spill containment. Warehouses require zoning by chemical class and permit inventory tracking software for oversight of inventories, shipments and rotation of stored materials. As chemical supply chains lengthen internationally, more storage capacity distributed across strategic global locations serves to maintain continuous operations. Additionally, surge storage supports the cyclic demands of consumer end-markets. The demand driven complexity of chemical supply networks depends on flexible, standardized storage management.

Insights by End-use Industry, Chemical industry dominates the market, owing to extensive applications

By end-use industry, chemical industry segment is estimated to contribute the highest market share of 25.1% in 2024. As a foundational industry, chemicals function as raw materials in diverse end-markets such as from plastics and detergents to pharmaceuticals and agrochemicals. Chemicals are fundamental to product development across consumer and industrial sectors, from polymers used in packaging and construction to surfactants employed in personal and home care goods. Due to their enabling properties, demand for chemical logistics steadily increases along with overall industrial production. The commoditization of chemicals leads to reduced input costs for downstream customers, thereby increasing consumption. Additionally, the performance requirements of engineered goods drive continuous chemical innovation, ensuring long-term growth in material demand. As global manufacturing capacity expands to emerging economies, the need for chemical transportation and storage also scales up within these industrializing regions.

Regional Insights

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North America has established itself as the dominant region in the global chemical logistics market with estimated market share of 40.3% in 2024. The U.S., being one of the largest producers and consumers of chemicals globally, has boosted demand for logistics and transportation services. The GCC region has witnessed the development of robust logistics infrastructure to support the presence of major chemical companies as well as numerous medium and small specialty chemical manufacturers. The majority of chemical production is concentrated along the Gulf coast, which has enabled the creation of dedicated transportation corridors for the movement of chemicals. The region also serves as the trade gateway for chemicals movement between North America and other regions.

Asia Pacific has emerged as the fastest growing regional market for chemical logistics. Rapid industrialization and economic growth of countries like China and India have significantly boosted local production of bulk and specialty chemicals. This has propelled the need for efficient logistics services to handle massive import-export activities and domestic distribution of chemicals across the vast geographical territories of Asian countries. Moreover, growing chemical hubs in countries like Singapore and Malaysia catering to international trade are further driving cross-border logistics needs. Several Asian nations are also proactively developing national logistics policies and upgrading ports, rail and trucking infrastructure to capitalize on the emerging opportunities. This has facilitated entry of global as well as regional logistics players to tap into Asia Pacific's lucrative growth prospects.

Market Report Scope

Key Developments

• In April 2022, C.H. Robinson, a global logistics company, and Waymo, a leading autonomous driving technology firm, formed a strategic partnership to accelerate the development of autonomous trucking for supply chains. This partnership involves Waymo Via's autonomous trucks hauling C.H. Robinson customer freight in multiple pilots over the next few years. The partnership aims to leverage expertise and knowledge sharing to drive long-term success in autonomous freight transportation for both customers and carriers.
• In July 2021, Aegis Logistics, a India-based oil, gas, and chemical logistics company, and Royal Vopak, an independent tank storage provider, formed a joint venture called Aegis Vopak Terminals Ltd (AVTL) to grow their LPG and chemical storage and handling business in India. The new partnership will operate a network of 8 terminals located at 5 strategic ports along India's east and west coasts, with a total capacity of around 960,000 cubic meters, making it one of the largest independent tank storage companies for LPG and chemicals in the country.
• In July 2021, Arkema S.A., a specialized chemicals and advanced materials company, partnered with Nexxiot to digitize its ISO tank and rail freight wagon fleets using Nexxiot's IoT devices and intelligent cloud platform. This partnership aimed to provide Arkema's clients with end-to-end visibility, enabling them to enhance quality standards and overall service experience.
• In February 2021, Agility Logistics, a Kuwait-based logistics company, partnered with Shipa, a U.S.-based digital logistics platform, to establish a bonded, expedited road freight network connecting businesses and consumers across the GCC Countries. This partnership is aimed to provide customers with new service offerings, including less-than-truckload (LTL) and full truckload (FTL) options, as well as a fast and cost-effective way to export parcels, pallets, or goods containers.

*Definition: Global Chemical Logistics Market involves the storage, transportation, and distribution of chemical products and raw materials within global supply chains. This includes hazardous chemicals, petrochemicals, and other industrial chemicals that require specialized logistics services due to safety and regulatory compliance needs. Companies operating in this market provide logistics solutions such as transportation of chemicals by road, rail, sea or pipeline networks, warehousing of chemicals in dedicated facilities, and value-added services like chemical blending and packaging.

Market Segmentation

•  Service Insights (Revenue, US$ Bn, 2019 - 2031)
  • Transportation & Distribution
  • Storage & Warehousing
  • Customs & Security
  • Green Logistics
  • Consulting & Management Services
  • Others
•  Mode of Transportation Insights (Revenue, US$ Bn, 2019 - 2031)
  • Roadways
  • Railways
  • Airways Waterways
  • Waterways
  • Pipelines
•  End-use Industry Insights (Revenue, US$ Bn, 2019 - 2031)
  • Chemical industry
  • Pharmaceutical Industry
  • Cosmetic Industry
  • Oil & Gas Industry
  • Specialty Chemicals Industry
  • Food & beverages
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • France
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • A&R Logistics
  • Agility Logistics
  • Al-Futtaim Logistics
  • BASF
  • BDP International, Inc.
  • BDtrans
  • C.H. Robinson Worldwide Inc.
  • CEVA Logistics
  • Deutsche Bahn (DB) Schenker
  • Deutsche Post AG (DHL)
  • DHL
  • Montreal Chemical Logistics
  • Petochem Middle East
  • Rhenus Logistics
  • Ryder System Inc.