Green Logistics Market Size, Share, Growth, Report 2024 to 2033

Green Logistics Market Size and Growth 2024 to 2033

The global green logistics market size was valued at USD 1.42 trillion in 2023 and is expected to be worth around USD 3.43 trillion by 2033, growing at a compound annual growth rate (CAGR) of 9.21% from 2024 to 2033.

Green logistics encompasses all business practices that minimize the environmental impact of the logistics network and delivery. Sustainable or green logistics delivers a strong bottom line without compromising customer satisfaction or the well-being of the planet. Smart companies are rushing to understand and adopt sustainable logistics management, supported by powerful technologies such as artificial intelligence, machine learning, and advanced analytics.

Future supply chains will be built around robust, AI-powered, cloud-based logistics solutions that help businesses automate shipping and tracking, optimize routes, figure out when and where to charge batteries, compute ETAs, keep an eye on vehicle maintenance, and much more. Data modeling and simulation routes and fleet capacities can be tested, and integrated technologies can assist in integrating and analyzing supply chain and delivery data throughout the whole value chain. Any step towards smoother and faster transportation and delivery of goods is a win-win situation that makes customers happier and more engaged and helps companies improve their sustainability profiles and profits.

The increasing adoption of electric vehicles (EVs) in the logistics sector and the rise in CSR-related initiatives by logistics companies are the driving factors of the green logistics market. However, the heavy dependence of the transportation sector on fossil fuels could prevent the market from growing. On the contrary, the increasing environmental awareness in end-use industries is likely to provide lucrative opportunities for green logistics industry players.

Report Highlights

• Europe has dominated the green logistics market, accounted revenue share of 35.60% in 2023.
• North America has accounted 29.40% of the total revenue share in 2023.
• By mode, the road segment has captured revenue share of 43% in 2023.
• By business type, the distribution segment has held revenue share of 53% in 2023.

Green Logistics Market Growth Factors

• Improved Long-Term Profitability: From the first to the last mile of delivery, green logistics reduces waste, costs, and carbon emissions. Although realizing the benefits of green logistics requires an initial investment, the downstream benefits outweigh the costs. A recent study found “evidence that companies with high levels of sustainability significantly outperform their peers in both stock market and balance sheet performance over the long term.” The bottom line is that green business means good business.
• New or Improved Partnerships: When companies use sustainable supply chains and green logistics, they become more attractive not only to customers but also to corporate partners. A recent study by HBR found that the largest global multinational companies use the United Nations Global Compact or the Carbon Disclosure Project (CDP) Supply Chain Program to assess the sustainability and environmental impact of their suppliers. Suppliers, in turn, are eager to partner with the biggest brands and invest to reduce their carbon footprint.
• Happier and Loyal Customers: Customers-both retail and corporate-demand fast delivery and the flexibility to make returns easily. They want to know in real time where their products come from, whether they are sourced and transported sustainably, and where they are in their journey. Companies that provide this insight and transparency win new customers and secure the long-term loyalty of existing ones.
• Better Corporate Responsibility Reputation: Large companies are increasingly being held accountable for their contribution to global warming, which is seen as a social justice issue. When companies publicly acknowledge the benefits of green logistics, they can prevail in the court of public opinion. Smart companies examine their environmental footprint both locally and globally. Those unwilling to change, especially moving away from fossil fuels, risk their reputation and are at a competitive disadvantage.

Green Logistics Market Trends

• Increasing Adoption of Artificial intelligence and big data analytics: Efficiency and predictability, big data analytics, and artificial intelligence (AI) are expected to play major roles in logistics optimization. Therefore, by employing machine learning algorithms, AI systems can help with data and pattern analysis in generating insights and promptly spotting latent insights. For example, by using predictive analytics to determine the fastest routes based on real-time conditions like traffic and weather, logistics companies can lower the cost of delays and increase efficiency.
• Digitalisation in the Logistics Industry: Digitalization is enabled in the logistics sector through key technologies that include robotics, data analytics, sensors, and the Industrial Internet of Things (IIoT). Digitalization of logistics and supply chain companies enables communication with other vehicles as well as command centers such as warehouses and corporate headquarters. Also, with the help of digitalization in freight forwarding, it has become easier to engage directly with shippers, transforming supply chain management.
• Expansion of Sustainable Logistics Solutions: Globally, the logistics and transportation sector is one of the major emitters of greenhouse gases. Statista estimates that the logistics and transportation sector accounts for about 17% of global emissions, with the energy sector coming in second. In the supply chain, sustainable logistics is at the forefront and has gained importance due to strict emission regulations and green business initiatives. In addition, several businesses are using environmentally friendly logistics solutions to reduce their environmental effect.
• Adoption of Autonomous and Electric Vehicles: Self-driving cars, or autonomous cars, can cut down on labor expenses and delays. Delivery process bottlenecks that the current teams may not be able to manage are a common cause of delays. As a result, they can aid in the removal of bottlenecks in the different supply chain procedures, such as packing, transporting, tracking, and sorting. Long- and short-distance drivers are using electric or hybrid vehicles more frequently as a result of the advancement of new electric technologies. Compared to conventional cars, electric vehicles produce fewer greenhouse gases into the atmosphere and require less maintenance, which lowers overall maintenance costs and boosts efficiency. These are just two of the numerous benefits of electric vehicles.
• Real-Time Data Gathering: Real-time data collection can be a future trend for logistics companies that can help collect real-time data at the province, street, and even city level to quickly stop or reroute shipments during extreme weather events, for example, to avoid losses.

Report Scope

Green Logistics Market Dynamics

Drivers

Increased Demand for Green Warehouses

• In the face of the global climate crisis, it is impossible to maintain existing warehousing practices that increase energy consumption and waste generation. Several crucial factors, such as the emergence of multi-channel distribution networks, a growing focus on green initiatives, and sustainability to reduce waste in logistics operations, are driving the development of smart warehousing markets. Sustainable warehousing offers an innovative approach that benefits businesses and the environment by emphasizing the effective use of resources, reducing carbon emissions, and promoting renewable energy.

Growing Concerns Regarding Environmental Pollution

• Consumers today are more environmentally conscious and prefer to support companies that are committed to sustainability. Customer preferences are compelling logistics companies to adopt environmentally friendly practices. In addition, great importance to sustainability is given by the investors who base their decisions on a company's environmental footprint. Therefore, logistics companies often include green logistics in their business plans so as to attract and retain investors.

Restraints

High Capital Expenditures

• Implementation of modern IT systems for tracking, monitoring, and optimizing logistic processes costs money. These systems are important for increasing productivity and reducing emissions, but the software and hardware come with high costs. Therefore, the implementation of automation using artificial intelligence for route optimization, inventory control, and warehousing is very expensive. This limits the growth of the green logistics market.

Implementation Complexities

• Implementing green logistics in companies is a complex of actions in logistics processes carried out according to the principles of green logistics. Managing sustainable performance in complex global supply networks remains a challenge, as current practices often do not meet optimal sustainability standards. Despite the clear benefits of green logistics practices, several variables affect their implementation.

Opportunities

Rise of E-Commerce

• In 2020, there was a 25% increase in e-commerce deliveries to consumers globally. As a result, the demand for last-mile delivery and return solutions has increased. It is hardly surprising that companies are starting to look for reliable, cost-effective, and express logistics solutions to meet the diverse needs of consumers.

Advancements in Technology

• Real-time tracking of vehicles, products, and equipment can be done through the usage of IoT devices. Sensors that are placed in shipments provide real-time information on location, temperature, humidity, and other different parameters. Optimization of routes helps in reducing fuel consumption and idle time. Similarly, IoT sensors on vehicles and machines can predict maintenance needed before any problem occurs. This also helps in minimizing unwanted emissions and downtime thus ensuring that the machines run as efficiently.

Challenges

Building Partnerships

• Forming alliances with various green logistics suppliers leads to driving sustainable change. Through these partnerships, the companies can access a wide range of cutting-edge technologies, pooled expertise, and best practices that can be easily made possible. On the other hand, developing such forms of relationships requires a trustworthy alignment of objectives, values, and long-term vision. Such situations can easily hinder market growth.

Lack of Infrastructure

• The logistics industry is not known for its high levels of sustainability. Companies face significant obstacles in implementing environmental policies in the logistics sector. Local authorities are in the process of setting emission limits, but a cross-sector agreement is needed to take action to build new facilities that meet the needs of those involved in logistics activities.

Green Logistics Market Segmental Analysis

Type Analysis

Transportation: When choosing sustainability initiatives, transportation should be closely monitored as it is one of the primary causes of pollution and carbon emissions. Market participants are forced to adopt more ecologically friendly transportation practices by the increasingly stringent emission standards and environmental regulations that are enforced by numerous governments and regulators worldwide.

Inbound Logistics: Inbound logistics refers to the transportation, storage, and receipt of goods in a company. It refers to the procurement of goods for office use or the manufacturing unit. In a manufacturing company, the manufacturing unit purchases raw materials or components from its suppliers for the manufacture of other goods.

Outbound Logistics: Outbound logistics is the demand side of the focus of the supply-demand relationship. The procedure comprises the storage and delivery of the products to the client or final user. Packaging, shipping, order fulfillment, delivery, and delivery-related customer support are among the steps.

Waste disposal and reverse logistics: The powerful e-commerce sector has led to a high demand for reverse logistics. Moreover, the transportation sector is expected to have access to profitable new growth opportunities because of the intense competition among logistics service providers in emerging markets.

Warehousing and material handling: There has been a gradual shift towards a more environmentally friendly way of storage and transport solutions are the trend. Automation and robots in warehousing not only reduce energy consumption but also increase productivity for distribution and logistics. Companies can equip the warehouses with solar and wind energy, energy-efficient lighting, and energy-efficient HVAC systems. Innovative reusable products, waste-reducing packaging strategies, and biodegradable materials are to be considered when it comes to material handling.

Packaging insulation: The term "green packaging," refers to packaging that utilizes as little energy as possible and is eco-friendly. Insulation packaging is a creative approach to environmentally friendly packaging. Utilizing available resources to package electronics can cut down on waste and the environmental effects of a business. Because the creative packaging is entirely composed of paper, fewer environmentally hazardous plastic materials are used.

Application Analysis

Consumer Goods Retail: Using sustainable practices to reduce the logistics network's environmental impact is known as "green logistics." Since they make up more than 50% of the logistics sector, retail supply chains are the biggest emitters in the sector. This is not unexpected, particularly in light of COVID-19. As e-commerce took off, packaging volumes rose sharply and exceeded the capacity of many logistics’ providers. The industry had to drastically opt for new measures to meet the growing demands of both corporate sustainability goals and consumers for environmentally friendly products leading to boosting demand for green logistics.

Semiconductors and Electronics: The semiconductor industry plays an important role in the global economy. The semiconductor industry provides various necessary technologies such as IoT, AI, advanced manufacturing technologies, etc. to various industries including automotive, electronics and communications, healthcare, construction, aerospace, etc. At a time when environmental awareness is shifting paradigms across industries, the electronics sector faces a particularly urgent call. "Green electronics" are those that are produced with minimal impact on the environment. They account for both carbon emissions and energy use. Recycled materials are used for creating green electronics, which helps in lowering the consumption of essential natural resources.

Chemicals and materials: Reusable or biodegradable packaging and materials are used in green logistics. Long-term cost savings for businesses can be achieved by using recyclable materials, despite their initial cost being higher than that of disposable materials and components. These include using cardboard pallets rather than wooden ones, reusing plastic wrap, and so on. Global commitments to sustainability combined with growing environmental awareness have created an urgent need for change.

Automotive: Commercial vehicles are severely restricted on public roads as they contribute significantly to pollution. As a result of this factor encouraging global logistics companies to adopt green environmental policies including the use of electric cars for their transportation fleet, the size of the global green logistics market is growing.

Energy and utilities: With the continued growth of global trade and associated parcel delivery volumes, there is a growing need for eco-friendly and neighborhood-friendly last-mile delivery solutions in cities and logistics operations. This development, coupled with an increasing shift towards renewable or “green” energy sources (solar, wind, etc.), is driving the development of electromobility and building solutions for logistics, helping the industry go green. With the right supply chain management, green practices essentially create more efficient logistics processes that reduce energy consumption.

Other: The “Other” segment includes banking and financial services, and healthcare. Green banking is a term used for practices and policies that make banks economically, environmentally, and socially sustainable. The goal is to make banking processes and the use of IT and physical infrastructure as efficient and effective as possible, with zero or minimal impact on the environment. Green healthcare – the incorporation of environmentally friendly practices into healthcare – is attractive to healthcare professionals and institutions for many reasons. Eliminating unnecessary healthcare waste in hospitals and providing better quality healthcare are the core themes of green supply chain management (GSCM). Green logistics in the pharmaceutical industry encompasses a set of practices aimed at minimizing the environmental impact of the supply chain.

Mode Analysis

Road: The roads segments has dominates the market and accounted revenue share of 43% in 2023. Roads play an important role in last-mile delivery and flexibility. Despite having an impact on the environment, owing to the green technology advancements road transportation is changing. By use of alternative fuels, electric, and hybrid vehiclesCO2 emissions are being greatly reduced. Road transportation effectively connects various supply chain components and is becoming more environmentally friendly owing to ongoing innovations. Road transportation helps in providing direct and adaptable delivery choices, which are necessary for satisfying clients and controlling inventory. By fuel-saving technologies and proper route optimization, the impact on the environment can be further reduced.

Rail: The rail segment has generated revenue share of around 24% in 2023. Rail transportation is considered to be safe, quick, stable, and environmentally friendly. Rail is usually consideredthe best option for long-distance transportation. It has several positive environmental effects, such as increased fuel economy, decreased carbon dioxide emissions, and less traffic. Rail transportation is a crucial component of green logistics.

Sea: The Sea segment has captured revenue share of around 13% in 2023. Sea freight is one of the economical and energy-efficient modes of transportation and most of the international trades are carried out by sea freight. Many large ships that are used for ocean freight, have the potential to produce significant amounts of greenhouse gases and thus worsen air pollution. Despite the benefits of sea freights, the environment and nearby communities tend to suffer because of oil spills and any other environmental mishaps related to shipping.

Air: The air segment has accounted revenue share of 11% in 2023. Although air freight is the fastest mode of transportation, it also adds a substantial amount to air pollution and greenhouse gas emissions. One of the main reasons for climate change and global warming is the emissions generated from airplane engines. However, by employing fuel-efficient aircraft technologies and lighter materials for packaging, air freight also prioritizes sustainability.

Intermodal: The intermodal segment has reported revenue share of 9% in 2023. When moving freight from the origin to the destination, intermodal transport refers to the use of two or more modes of transportation. Costs can be cut, productivity can rise, and customer service can be enhanced. When you use the most efficient mode of transportation for each leg of the journey, intermodal transport can help you save energy and lessen your carbon footprint.

Green Logistics Market Regional Analysis

North America hit notable growth in green logostics market

The North America green logistics market size was accounted for USD 0.42 trillion in 2023 and is expected to reach around USD 1.01 trillion by 2033. Corporate sustainability commitments and stringent environmental regulations are the factors driving the market. Market players are progressively implementing eco-friendly strategies to satisfy legal requirements and customer demands that are more environmentally friendly, such as electric cars, sustainable packaging, and route planning that maximizes efficiency. As a result of these developments and initiatives, green logistics is expanding which emphasizes lowering carbon footprints and enhancing the effectiveness of the supply chain across a wide range of sectors. In addition, to these, the expansion of the market in the region is being driven by the growing need to comply with regulations and demand from customers for environmentally friendly practices.

Why is Europe holding the largest share in the healthcare green logistics market?

The Europe green logistics market size was estimated at USD 0.51 trillion in 2023 and is projected to surpass around USD 1.22 trillion by 2033. Europe has strict environmental regulations and standards. Market players are implementing sustainable logistics practices, such as utilizing electric vehicles and installing energy-efficient systems because of the stringent green mandates and climate policies of the European Union. This regulatory mandate along with a strong corporate commitment towards sustainability accelerates the development and adoption of environmentally friendly logistics solutions in the region. It is projected that increased focus on reducing carbon emissions and encouraging the development of green technologies will fuel market growth in Europe. In addition, the expansion is being driven by the need to comply with regulations and the growing demand from customers for environmentally friendly practices.

Why is the Asia-Pacific region expected to see significant growth in the green logistics market?

The Asia-Pacific green logistics market size was estimated at USD 0.31 trillion in 2023 and is projected to hit around USD 0.75 trillion by 2033. In recent years, the Asia-Pacific region has made great progress in the field of sustainable development, with many countries dedicated to green and sustainable growth. To guarantee the region's sustainability, more work is to be done by reducing the emission of greenhouse gases, and slowing down climate change requires the usage of renewable energy. The government in the region encourages investment in renewable energy by providing incentives for companies and individuals to use clean technologies and invest in renewable energy infrastructure.

LAMEA green logistics market is growing

The LAMEA green logistics market was valued at USD 0.19 trillion in 2023 and is anticipated to reach around USD 0.45 trillion by 2033. The LAMEA green logistics market is growing due to increased awareness of energy efficiency and advances in building infrastructure. Demand in the LATAM region is being driven by sustainability and modern construction, while in the Middle East, there is substantial investment in large-scale projects and cutting-edge technologies that are driving market growth. Africa may have limited resources, but owing to several international collaborations and funding, access to cutting-edge tools is expanding throughout the continent.

Green Logistics Market Top Companies

• Agility Public Warehousing Company K.S.C.P.
• ARK India
• AI Futtaim Logistics
• Bollor SE
• DHL International GmbH
• Mahindra Logistics Ltd
• CEVA Logistics
• Deutsche Post DHL Group
• DSV
• FedEx Corporation
• GEODIS
• Go Green Logistics
• Gosselin Logistics
• Bowling Green Logistics 
• Green Logistics LLC
• United Parcel Service
• States Logistics Services, Inc
• The Green Group
• United Parcel Service of America, Inc.
• Westerman Multimodal Logistics
• XPO Logistics, Inc.
• Yusen Logistics Co., Ltd

The majority of the market share for green logistics is held by businesses like Deutsche Post DHL Group, FedEx Corporation, and UPS (United Parcel Service). These companies help in encouraging sustainable practices by utilizing their extensive global networks. With a reputation for setting high standards for the environment, DHL has invested heavily in green technologies like electric cars and eco-friendly packaging.

UPS has established a strong position through its extensive fleet optimization and commitment to renewable energy. FedEx Corporation also plays a pivotal role by advancing green logistics solutions and incorporating innovative technologies. FedEx’s efforts include the deployment of electric delivery vehicles, the use of sustainable fuels, and significant investments in energy-efficient infrastructure. These key players, with their innovative approaches and strategic initiatives, underscore their leadership and influence in the evolving green logistics market.

CEO Statements

Stefan Paul, CEO of Kuehne+Nagel:

"Today the logistics industry faces unprecedented challenges — from shifting consumer needs, increasing energy prices and the war in Ukraine, to post-pandemic adjustments, and a need to make our industry more sustainable."

Vincent Clerc, CEO of A.P. Moller - Maersk:

"A.P. Moller-Maersk wants to accelerate the green transition in shipping and logistics and a crucial next step is to introduce regulatory conditions which ensure that we create the most greenhouse gas emission reductions per invested dollar. This includes an efficient pricing mechanism to close the gap between fossil and green fuels and ensuring that the green choice is easier to make for our customers and consumers globally. The momentum for green fuel is building and we are pleased to see strong partnerships across the industry as we continue our joint efforts of making decarbonization in shipping successful."

Recent Developments

Key players in the Green Logistics Market are pivotal in delivering a variety of innovative construction solutions, such as prefabrication techniques, sustainable materials, and advanced digital technologies. Some notable developments in the Green Logistics Market include:

• In July 2024, FedEx Corporation is advancing its sustainability efforts in Asia Pacific with significant initiatives, including fleet electrification and renewable energy integration. The company operates over 7,100 electric vehicles globally, with expansions in Malaysia and China, and has introduced electric tricycles in Taiwan. The Beijing facility will cut 350 tons of CO2 annually with solar energy. FedEx’s GoGreen program engages 11,000 team members in China to further reduce environmental impact.
• In May 2024, UPS unveiled its Cambridge cycle hub, introducing eQuad electric-assist bikes for efficient, zero-emission city deliveries. The eQuads navigate cycle lanes and restricted zones, offering a sustainable solution for congested urban areas. Artur Drenk, UPS's sustainability director, highlighted the initiative as a testament to their commitment to innovative and eco-friendly delivery solutions.
• In April 2024, DHL Global Forwarding announced the Prada Group's first investment in Sustainable Aviation Fuel (SAF) credits through DHL Global Forwarding's GoGreen Plus service. By utilizing sustainable fuels, DHL Global Forwarding helps customers significantly reduce their air freight transport emissions.
• In November 2023, Yusen Logistics Co., Ltd. proudly announced a significant step towards environmental sustainability. They have set a 45% CO2 reduction target by 2030 from our 2022 baseline, focusing on scope 1 and 2 emissions. Recognizing the urgency of climate change, we're committed to reducing our carbon footprint by targeting direct emissions and those from purchased electricity, heat, and steam.

These advancements mark a notable expansion in the green logistics market, driven by strategic acquisitions and innovative projects. The focus is on boosting sustainability, enhancing construction efficiency, and broadening product offerings to meet diverse building needs.

Market Segmentation

By Type

• Transportation
• Inbound Logistics
• Outbound Logistics
• Disposal and Reverse Logistics
• Warehousing and Material Handling
• Packaging

By Business Type

• Warehousing
• Distribution
• Value added services 

By Mode

• Road
• Rail
• Sea
• Air
• Intermodal

By Application

• Retail Consumer Goods
• Semiconductor and Electronics
• Chemical and Material
• Automotive
• Energy and Utilities
• Others

By End Use

• Healthcare
• Manufacturing
• Automotive
• Banking and financial services
• Retail and E-Commerce
• Others

By Region

• North America
• Europe
• APAC
• LAMEA