Chemical Logistics Market Trends

Growth Drivers

• Implementation of digital technologies: The chemical logistics market is witnessing increasing adoption of digital technologies and automation to boost operational efficiency. Some of the advanced technologies are automated warehousing, RFID/tracking systems, the Internet of Things (IoT), predictive analysis, cloud computing, artificial intelligence (AI), and cognitive computing. For instance, a study by the Gulf Petrochemicals & Chemicals Association estimates digital technologies are emerging as a game changer in the chemical logistics sector and around 40% of the leading market players have implemented artificial intelligence in their supply chains. The same source also revealed that the companies with advanced logistics witnessed better financial performance scoring revenue growth and profitability of 42% and 68%, respectively, in 2022.
• Growing adoption of green logistics: The increasing adoption of sustainability practices by every organization and the growing emphasis on green logistics are some latest market trends. Green supply chain management aims to reduce waste and preserve energy, meeting the regulatory requirements. Some examples of green logistics are the adoption of electric vehicles for transportation resulting in less carbon emission, the use of biodegradable material for packaging, and IoT-enabled sensors for product tracking.

Challenges

• Transportation complexities: Navigating a complex web of local, national, and international regulations for transporting hazardous materials can be challenging. Compliance with various safety and environmental standards increases operational complexity and costs. Transporting chemicals, especially hazardous ones, involves significant safety risks. Ensuring proper handling, containment, and emergency response measures adds complexity and can increase insurance and liability costs.
• Unavailability of advanced logistic infrastructure: Inadequate infrastructure for the safe transportation and storage of chemicals is one of the major factors hampering the chemical logistics market growth. Many countries in the developing region lack purpose-built facilities designed to handle hazardous chemicals. Specialized equipment and containments measure aid in preventing leaks, spills, or any accidents, unavailability of such solutions can hamper the supply chain process.