Market Overview

The total market size of 15 categories of logistics industry was estimated at 24,366,500 million yen for FY2022, 106.2% of the preceding fiscal year (estimated by adding each subcategory’s market size, based on the sales of businesses; there may be some overlaps in the totaled market size).

Viewing the market by category, international shipping by vessel operating common carriers (VOCC) expanded due to strong freight markets until around September 2022 and the weak yen. A significant recovery was also observed in 3PL providers, which attributes to mergers and acquisitions, including overseas companies. Underpinned by the growth of VOCC and 3PL, which occupy a significant portion of the total logistics market, even though the level of growth was not as high as FY2021 (114.4%), the total market size of 15 categories of logistics industry expanded for FY2022.

However, according to the statistics of the Ministry of Land, Infrastructure, Transport and Tourism, neither domestic nor international cargo traffic in FY2022 recovered to pre-pandemic FY2019 levels. As seen in the previous fiscal year, the growth was chiefly driven by the price rise, not by the volume.

Noteworthy Topics

Market Size Expands, Yet Freight Volume Remain Weak

Following the downgrading of the new coronavirus to Category 5 infectious disease in May 2023, gradual recovery from pandemic-led decline is observed in freight volume, warehouse traffic (the activity of incoming goods and outgoing goods or commodities), and 3PL operations. Nonetheless, freight volume has not returned to the pre-pandemic FY2019 levels.

Domestic cargo traffic had been trending downward inherently due to declining population, falling birthrate, aging population, and hollowing out. Even when the influence of the COVID crisis lessens, domestic freight volume is not expected to grow significantly. On top of that, sluggish consumption from around FY2022 as the consequence of price hikes have impeded the recovery of freight volume.

On the other hand, logistics companies that have overseas business earned more thanks to the weak yen that worked positively on the dollar-denominated freight rates. In particular, shipping companies operating ocean going vessels increased sales significantly, as ocean freight is mostly denominated in dollars. In addition, soaring fuel cost and labor cost gave a rise to ocean freight rates.

Recent expansion of the logistics market stemmed from price hikes, not from freight volume. We believe this trend persists for years to come.

Future Outlook

The total market size of 15 categories of logistics industry is projected to diminish to 23,401,500 million yen for FY2023, 96.0% of the preceding fiscal year.

Global demand for logistics is expected to decline because of inflation-led weak consumption in Europe and economic downturn in China. Similarly, the growth of domestic freight volume is likely to be weak against the backdrop of sluggish consumption due to price hikes.

By category, the markets of 3PL, warehousing business, moving companies, and cargo van delivery business foresee year-on-year growth. Nevertheless, the total market size of 15 categories of logistics industry is expected to fall for FY2023 because of a downward trend in categories that occupy relatively high share in the total market, such as VOCC, freight forwarder, and general port & harbor transportation business.

Research Outline