Transportation & Logistics

Worldwide car sales grew to around 75.3 million automobiles in 2023, up from around 67.3 million units in 2022. Throughout 2020 and 2021, the sector experienced a downward trend on the back of a slowing global economy, while COVID-19 and the Russian war on Ukraine contributed to shortages in the automotive semiconductor industry and further supply chain disruptions in 2022. Despite these challenges, 2023 sales surpassed pre-pandemic levels and are forecast to keep rising through 2024

Covid-19 hits car demand It had been estimated pre-pandemic that international car sales were on track to reach 80 million. While 2023 sales are still far away from that goal, this was the first year were car sales exceeded pre-pandemic values. The automotive market faced various challenges in 2023, including supply shortages, automotive layoffs, and strikes in North America. However, despite these hurdles, the North American market was among the fastest-growing regions that year, along with Eastern Europe and Asia, as auto sales in these regions increased year-on-year.

Chinese market recovers After years of double-digit growth, China's economy began to lose steam in 2022, and recovery has been slow through 2023. China was the largest automobile market based on sales with around 25.8 million units in 2023. However, monthly car sales in China were in free-fall in April 2022 partly due to shortages, fears over a looming recession, and the country grappling with the COVID-19 pandemic. By June of that same year, monthly sales in China were closer to those recorded in 2021.

The global ride-sharing market is expected to grow to by more than 40 percent between 2023 and 2028. The market value is expected to amount around 216 billion U.S. dollars in 2028. DiDi, Uber, and Lyft are among the key players in this industry.

The ride-sharing market’s rapid growth is being fueled by several key factors: Consumers, particularly younger adults, seek to avoid the large overhead costs of car ownership. It is expected that ride-sharing will be most popular in cities where vehicle ownership is not only costly but also less practical due to traffic congestion and limited parking. Ride-sharing’s reach has been enabled by widespread smartphone use and mobility apps are particularly popular in India and China, making mobility services likely to see large revenue streams in regions such as China. The industry may struggle to take over the market in areas where public transportation is well-funded and attractive to use and hence, Europe is the region where the market for urban mobility platforms that combine individual and shared mobility options has the greatest potential.

Car-sharing and ride-sharing represent parts of a wider aspect of the transportation industry, shared mobility. Either vehicles or mobility services are shared between consumers on an on-demand basis. Car-sharing provides consumers more privacy and less contact with strangers than ride-sharing. The value pool for ride-hailing is expected to be more than 14 times the size of the car-sharing market by 2030. 

Union Pacific is one of the leading railroad companies in the world, with an estimated market value of 149.46 billion U.S. dollars as of June 2024. 

North America leads the world's largest railway companies

With over 24 billion U.S. dollars in operating revenue, Union Pacific focuses on hauling freight like coal, industrial, chemical or agricultural products on the largest railway network in the world. Canadian National Railway came in second, valued at some 81 billion U.S. dollars. The railroad company is Canada’s largest railway freight provider, also hauling freight throughout the Midwestern and Southern parts of the U.S.. Overall, the five companies with the highest market capitalization as of June 2024 were all located in North America, in part due to the region's reliance on Class I freight railroads for trading across borders. Hong Kong's Mass Transit Railway (MTR) came sixth in the ranking, with a market valuation under half that of Canadian Pacific Railway. 

The U.S. rail industry

While only 0.55 percent of the United States' 2019 gross domestic product was invested in the construction and maintenance of its infrastructures, the high-speed rail line in California was one of the largest rail infrastructure projects worldwide as of February 2022, based on its value. The U.S. also relies heavily on rail freight to cover the country's large distances between urban areas: The mileage of Class I railroads amounted to 91,800 statue miles for 66 billion U.S. dollars in total operating revenue in 2020.

The global supply chain pressure index reached -0.85 points in April 2024, down from -0.3 points in the previous month. After the challenging conditions caused by the COVID-19 pandemic, the supply chain pressure index has returned to the pre-pandemic levels.

In 2023, the global air traffic passenger demand grew by over 36 percent compared to the previous year, when the passenger demand increased by nearly 64.3 percent. This figure was forecast to grow approximately 12 percent in 2024.

The number of flights performed globally by the airline industry has increased steadily since the early 2000s and reached 38.9 million in 2019. However, due to the coronavirus pandemic, the number of flights dropped to 16.9 million in 2020. The flight volume increased again the following years and was forecasted to reach a new peak of 40.1 million in 2024.

The global airline industry The number of flights performed increased year-on-year continuously to transport both passengers and freight. The industry’s recent growth can be attributed to a combination of increasing living standards and decreasing costs of air travel. While North American and European airlines currently dominate in terms of both revenue and passengers flown, it is predicted that future growth will be highest in markets of Asia.

Container freight rates oscillated dramatically between January 2023 and August 2024. Freight rates slumped to their lowest level on the 26th of October 2023, when the going rate for a 40-foot container was only 1,342 U.S. dollars. Since then, the global freight rate has significantly increased, hitting over 5,900 U.S. dollars in July 2024, the highest value on record.

The global supply chain is a fragile system consisting of numerous links. Disruption to one can send cascading effects down a chain that needs to function properly for the whole system to work. The COVID-19 pandemic turned out to be an event of such a magnitude to either bring to halt whole industries and supply chains, or severely reduce their efficiency. Due to its complexity and transcontinental nature, container shipping was hit especially hard by the COVID-19 pandemic. Since the start of the pandemic, the shipping industry has had to struggle with port closures and congestions, labor shortages, difficulties with capacity utilization, as well as a lack of new shipping containers. These challenges continue to have repercussions on the industry to this day.

While costs of operating a container fleet have increased, the surge in freight rates has not served just to cover rising expenses. Container ship operators had been reporting record-high operating profit margins since the beginning of the pandemic. However, despite these high profit margins, the freight rate increase has had some repercussions. In the second quarter of 2023, main container shipping companies had an average profit margin of 8.9 percent, a decrease of almost 50 percent compared to the peak EBIT in the first quarter of 2022. Despite this decrease, some of the carriers are combating this trend by using their previous profits to increase their carrying capacity by buying new containers and ordering new container ships. However, the delivery of these newly ordered ships is still years away.

It is estimated that 2023 saw plug-in electric light vehicle (PEV) sales of around 13.7 million units. The Chinese market picked up steam after a period of slowdown in 2020, as vehicle manufacturing and demand was at a standstill due to the COVID-19 pandemic. Meanwhile, electric vehicle sales in some of Europe's five largest markets surged in 2023.

Electric car sales growth Global automobile production dropped significantly with the pandemic, with millions of jobs in the industry at risk globally. Later in the year when lockdowns were lifted, demand for new cars bounced back, but the automotive semiconductor shortage impacted supply. Despite these issues, the electric car market experienced a record year, with an increase of over three million in global electric car sales, and notable market share growth.

A present task for the future Many governments put forward green stimulus packages during the pandemic, many of which were directed towards supporting the automotive industry and securing jobs in the sector, with an emphasis on the clean transition. In China, the full new energy vehicle (NEV) subsidy program phase-out was postponed from the end of 2020 to the end of 2022. However, these investments are starting to be rolled back. In Germany, the largest car market in Europe, electric vehicle subsidies abruptly stopped at the end of 2023, following in the footsteps of countries like Norway, which have also moved away from subsidies.

The port of Shanghai was the largest container port in 2023, handling containers with a capacity of over 49 million twenty-foot equivalent units (TEU). In 2023, eight out of the ten busiest container ports were located in Asia.

The world's largest container ports The busiest container ports in Asia include Shanghai, Singapore, and Hong Kong. In the United States, the neighboring ports of Los Angeles and Long Beach form the largest container hub in the country. The cities of Rotterdam, Hamburg, and Antwerp are home to the largest ports in Europe. In terms of value, seaborne trade carried by container ships is the most important category of waterborne freight, and container handling is one of the key sources of revenue produced by the operation and management of a port. Intermodal containers usually have a capacity of one or two twenty-foot equivalent units, a standard unit of measure which is often being abbreviated to TEU.

The world's largest container terminals Singapore’s PSA International is ranked among the world’s leading marine terminal operators, followed by Hutchison Port Holdings, which is headquartered in the British Virgin Islands. PSA International operates several ports around the world, generating almost 4.7 billion Singapore dollars in revenue in 2021.

In 2023, the ranking of the world’s largest car brands was topped by Toyota with a market share of around 10.7 percent. The Toyota brand is owned by Japan's Toyota Motor Corporation, the world's largest motor vehicle manufacturer.

New trends in the auto industry

In light of growing environmental awareness and increasing efforts to connect vehicles, automotive manufacturers are faced with a variety of new challenges. Market trends such as the shift to lighter materials, as well as the trend towards electric and autonomous vehicles are set to revolutionize the industry. Palo Alto-based Tesla Motors is currently at the vanguard of the trend towards electrification, while peer Californian companies such as Google and Apple may follow suit. Tesla delivered nearly 1.81 million vehicles in 2023, meaning that Volkswagen Group's sales tally is over five times as much.

The state of the global auto industry

Car sales worldwide have dipped between 2019 and 2020 as a result of the economic downturn generated by the COVID-19 pandemic. 2021 sales recovered, despite remaining below 2019 levels, but supply chain shortages led to a slow recovery of sales in 2022. By the end of 2023, the global car sales volume had grown over pre-pandemic levels. China was the largest automobile market based on new passenger car registrations, recording close to 25.8 million units sold. It was followed by the United States and Europe. China was also the leading passenger car producing country in 2022.