Market Overview

This research has calculated the market size for the work primarily conducted in warehouses, such as tasks applied to products and product bodies, adjustments in volume, capacity, or units, work on exterior packages, and other tasks, aiming to increase the value of the products and merchandise during logistics processes. The market size for distribution processing services was estimated at 1,080 billion yen in FY2023, based on company sales. This accounted for 4.6% of the total logistics market size, which was projected to be 23,401.5 billion yen in FY2023 (*).

An increasing number of logistics companies are providing one-stop services from upstream to downstream of the supply chain. They are building more efficient, optimal logistics systems by providing integrated logistics services. These services include value-added distribution processing and go beyond traditional warehouse storage processes.

(*) Reference: “15 Categories of Logistics Industry in Japan: Key Research Findings 2024” released on 23 July 2024
https://www.yanoresearch.com/en/press-release/show/press_id/3582
Note: The total market size of 15 categories of logistics industry is estimated by adding each category's market size, and therefore, there are some overlaps in the totaled market size.

Noteworthy Topics

The Backdrop of Greater Importance in Distribution Processing Services for Logistics Companies

It is impossible for distribution processing services to be pivotal in the logistics industry, whose primary work is transportation and storage. Nevertheless, the services are gaining attention as part of expanded logistics processes that promote optimized supply chains and add value.
The reasons for this are 1) a decrease in domestic freight transportation volume, 2) an increase in demand for more efficient transportation, 3) progress in warehouse automation, and 4) an increase in ecommerce shoppers. Distribution processing services in logistics have the potential to enable logistics companies and shippers to differentiate themselves and increase their revenues.

Future Outlook

The market size for distribution processing services in logistics is forecast to reach 1,110 billion yen in FY2024, 102.8% of the previous year's level. As the overall logistics market grows, so does the demand for distribution processes. Compared to traditional logistics areas, such as transportation and storage, distribution processing services are expected to grow more. Logistics companies can capitalize on this growth by expanding the scope of work traditionally handled by shippers, including manufacturers and retailers. 

The key to expanding the market size lies in the optimization of distribution processing within the supply chain. Shippers must determine the most optimal work processes based on multiple factors, such as transport and storage efficiency, work efficiency, freight volume optimization, product and merchandise differentiation, lead time, and securing enough workers.
In the future, logistics companies will no longer be limited to consigned work in their distribution processing work. They are required to understand the challenges and demands of their clients, with the aim of expanding and evolving this service business into a proposal-based one that promotes an efficient supply chain.

Research Outline