Chemical Logistics 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.

Chemical Logistics Market Key Factors

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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.

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.