The North America automotive logistics market comprises of automotive parts delivery services, warehousing and transportation services. Automotive logistics helps in efficient transportation of vehicles and auto components across various locations. With an aim to reduce operational costs and delivery time, automotive manufacturers are increasingly outsourcing logistics services to third-party logistics providers.
The Global North America Automotive Logistics Market is estimated to be valued at US$ 86.07 Bn in 2024 and is expected to exhibit a CAGR of 7.4% over the forecast period 2024 to 2030.
Key Takeaways
Key players operating in the North America automotive logistics are Diageo, William Grant & Sons, Castle Brand, Jameson Irish whiskey, and The Old Bushmills Distillery Co. With the rising automotive production and sales in the region, third-party logistics providers are exploring opportunities to enhance service portfolios and expand geographical footprints. Technological advancements such as telematics solutions, transportation management systems and warehouse automation are helping automotive logistics companies to improve efficiency and reduce costs.
Market drivers
The growing automotive sales across the US and Canada is a key driver for the automotive logistics market in North America. According to industry estimates, over 17 million new light vehicles were sold in North America in 2021. With increase in outsourcing of logistics functions by OEMs, third-party logistics providers are witnessing higher revenues. Further, implementation of supply chain management software solutions enables real-time tracking of shipments and automating distribution activities. This is enhancing transport fleet utilization and reducing logistics costs.
Current challenges in North America Automotive Logistics Market:
The North America Automotive Logistics Market Size is facing various challenges which are hindering its growth. The most significant challenge is the lack of adequate infrastructure across many regions. The roads and highways are not sufficient enough to support the large-scale vehicular movement for automotive logistics. There is a dire need for investments in upgrading the transportation infrastructure. Another major challenge is the increasing traffic congestion in major cities. With growing vehicle sales and limited road expansion, traffic jams have worsened affecting timely delivery. Rising fuel costs have also put pressure on automotive logistics companies operating on tight margins. Finding and retaining skilled drivers is also a challenge due to fewer people joining the transportation industry. Lastly, fluctuations in vehicle demand pose supply chain issues for automotive logistics players.
SWOT Analysis
Strength: Established transportation infrastructure in USA and availability of skilled labor. Weakness: Increasing traffic congestion and lack of infrastructure in smaller cities. Opportunity: Integration of advanced technologies like IoT, AI and automation. Threats: Rising fuel costs, driver shortage and fluctuations in vehicle demand.
Where the North America Automotive Logistics Market is concentrated in terms of value:
The North America automotive logistics market is highly concentrated in the United States, which accounts for around 80% of the total market value. This is because US is the largest vehicle market in the region with presence of major automakers and their manufacturing facilities. States like Michigan, Ohio, Indiana attract maximum automotive logistics investments and activities due to clustering of OEM plants. Other major automotive hubs contributing significantly include Illinois, Tennessee and Kentucky. Canada and Mexico are other important country markets, though relatively smaller in size compared to US.
Fastest growing region for the North America Automotive Logistics Market:
The southern region of United States is projected to be the fastest growing market for automotive logistics during the forecast period. States like Texas, Florida, Georgia, Alabama are witnessing rising vehicle sales and new plant investments by automakers. For instance, many Japanese automakers have set up or expanded their factories in southern US states. This is positively impacting the automotive logistics demand. Moreover, these states have strategically located seaports and are near the manufacturing clusters in northern Mexico and Canada, providing improved access to foreign markets. Their business-friendly policies and availability of land and labor are attracting more companies to set up logistics hubs.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it