How Big is the Logistics Industry in the US?

How big is the logistics industry? - FreightWaves

The logistics industry in the US is very competitive. Many businesses invest in this sector, such as the firm, shipping and logistics management by Sure Logix. How big is the logistics industry in the US? Well, many multinational firms take advantage of this large industry so that their businesses have a better facilitator in the flow of goods to distribute to one of the world’s largest consumer markets. 

Not only multinational firms but international and domestic companies can benefit from this industry because of the highly skilled workforce and the relatively low costs and regulatory burdens that they can enjoy. The United States has a highly integrated supply chain network. This network links the producers to the consumers.

This link is built from multiple transportation methods such as air and express delivery services, freight rail, maritime and truck transport so that they can meet the demands of their customers efficiently. Most multinational and domestic companies even offer customized logistics and transportation solutions so that there is a coordination of the goods that move from the origin to the end user through each supply chain  network segment. 

What is the size of the logistics industry?

In the United States, the logistics of physical items typically includes the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing, and security. In 2019, the value of American new private sector warehouse construction alone rose  to around 33.8 billion U.S. dollars. 

Logistics services are a part of all levels in the planning and execution of the movement of goods. These may involve through air and express delivery services (EDS), freight rail, maritime, or trucking.

In 2019, the total mail volume delivered by the United States Postal Service alone was over 142.5 billion units. The export value of U.S.-NAFTA air freight flows in 2019 amounted to almost 21.8 billion U.S. dollars and the volume of rail freight transported in the United States in 2018 amounted to over 2.5 trillion tonne kilometers. The overall total U.S. ton-miles of freight are expected to reach 7.67 trillions of ton-miles by 2045.

The United States freight and logistics market is expected to have an AGR of 3.2% during the forecast period of 2020-2025. The market is expected to be centered by the competition between the trucking and rail freight segments. 

What is the logistics industry worth?

According to Freight waves, the estimates of the size of the global logistics industry range from $8 trillion to $12 trillion annually. The rule normally is that many forecasters use a percentage of GDP. In the United States, some estimate that up to 10% of GDP is due to the logistics industry in any given year. Based on economic activity in 2019, the U.S. logistics market is closer to the $2 trillion level.

Globally, experts believe that the logistics market represents approximately 12% of the entire world’s Gross Domestic Product (GDP). The difference in the percentage of GDP used to predict the size of the logistics market has been caused by the inefficiencies that exist in supply chains in many regions outside of the United States, creating a higher cost structure by comparison.  

The global logistics market was $9.6 trillion in 2018, according to research and consulting firm Armstrong & Associates Inc. The trucking industry accounted for 43% of total logistics costs globally. The costs associated with storing inventory represented one-third with non-trucking modes – maritime, rail and air – under 14% of the total.  

How many people in the US work in logistics?

From the data found at the Bureau of transportation statistics or BTS, the transportation and transportation-related industries employ over 13.3 million people, accounting for 9.1 percent of workers in the United States. Employment in these industries rose steadily from 2011 to 2015 to 13.6 million, exceeding the  pre recession levels, then declined to 13.3 million in 2017.

Four of the five largest transportation-related occupations involve driving. These four occupations (heavy-duty, light-duty, and delivery truck drivers; school bus drivers; and driver/sales workers) employ 3.6 million workers and account for 35.7 percent of total transportation-related employment.