Market Overview

The total business sales of the fifteen logistics industry sectors, including some duplications, amounted to 23,449.5 billion yen in FY2023, representing 96.2% of the previous fiscal year’s size. As the supply-demand imbalance was resolved, prices for maritime and air freight transportation, as well as for freight forwarding businesses, declined after having previously soared. These factors, along with slower growth in cargo transportation volume in and out of the country, reduced the market size.

The combined market size of the fifteen logistics sectors is expected to reach 24.6405 trillion yen in FY2024, which is equivalent to 105.1% of the previous year’s size. Demand for maritime and air freight transportation in international logistics recovered from the previous year, particularly for shipments from China to Europe and the United States. This increased demand is expected to raise transportation costs from Asia, including Japan, to Europe and the United States. The increase in fares, along with the weaker yen, will likely continue to impact the growth of the maritime transportation market.
In domestic logistics, labor costs are projected to rise further to recruit and retain drivers. As freight owner companies begin to understand driver shortage situations, transportation businesses are finding it easier to pass on prices. This is expected to boost the logistics market, especially in land transportation, such as trucking. However, consumer activity may decline further due to rising food prices and a decline in the volume of imported freight resulting from the weaker yen.
Overall, the expansion of the combined market size of the fifteen logistics sectors will likely stem from rising transportation fees and prices as few factors are expected to increase freight volumes in both international and domestic logistics.

Noteworthy Topics

Appointment of Chief Logistics Officers (CLO)

In May 2024, the Law Concerning the Efficiency of Material Distribution (Logistics Efficiency Law) was revised to promote sustainable growth in the logistics industry. The revision mandates freight owners and logistics companies to strive for efficiency improvement measures. Additionally, beginning in FY2026, businesses of a certain size must create medium- to long-term plans and regularly report on their contributions to logistics efficiency improvements. As part of these obligations, specific freight owners and chain operators (franchise chain headquarters) must appoint a Chief Logistics Officer (CLO).

Rather than accommodating logistics companies, freight owner companies should appoint a CLO to meet their own strategies. In other words, they should reap the benefits of increased logistics efficiency rather than benefit logistics companies. It is important for them to take the lead in improving logistics efficiency and reevaluating supply chains, thereby aligning with their business strategies. If they entrust all efficiency initiatives to logistics companies, the results may not align with their business strategy.
Conversely, focusing solely on one's own convenience may generate risks of not being selected by logistics companies. To improve logistics efficiency that meets both the company’s business strategy and the needs of logistics companies, it is necessary for a CLO of freight owners to communicate with logistics companies as partners.

Future Outlook

The combined market size of the fifteen logistics sectors is expected to reach 24.765 trillion yen in FY2025, which is equivalent to 100.5% of the previous fiscal year.
Four sectors—maritime transportation, general harbor transportation, consolidated freight trunking transportation, and moving services—are projected to decline from the previous fiscal year. Conversely, seven sectors are expected to grow, i.e., third-party logistics (3PL) services, general warehousing, refrigerated warehousing, air freight transportation, rail freight transportation, rail freight forwarding, and lightweight freight delivery.
Please note that the increase in the U.S. tariffs is taken into account for the sluggish export volume in maritime and general harbor transportation. However, the increase in the U.S. tariffs has not been factored into 3PL or general warehousing due to too many uncertain factors. The 3PL sector is expected to steadily expand, because it provides freight owners with multiple logistics services that support their entire supply chain, both domestically and internationally. 

Research Outline