Chemical Transportation Market Size, Share & Growth [2031]

Report Description

Chemical Transportation Market Outlook 2031

The global chemical transportation market size was USD 262.7 Billion in 2022 and is likely to reach USD 361.2 Billion by 2031, expanding at a CAGR of 4.3% during 2023–2031. The market is propelled by the increasing use of chemicals in various end-use products.

Rapid expansion of various industries that make extensive use of chemicals is expected to boost the market during the assessment market. The economic growth of several developing countries is leading to a high demand for different chemicals with the industrial expansion and setting up of new factories & plants. This is causing a surge in chemical production and consumption, further fueling the need for proper chemical transportation.

• In October 2021, Rhenus Group made the strategic addition of 2.2 million square feet of warehousing space all across India to reinforce its capability in the chemical industries. This is intended to provide good route connectivity between the major industrial & automobile hubs and major ports of Chennai.

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The transportation route is determined based on the type of chemical, along with the mode of transportation such as road, air, or sea transport. The rising safety concerns are leading to significant investments in developing secure methods and equipment that ensure secure transportation of chemicals through the supply chain networks. The technological innovations in packaging, tracking, and handling of chemicals further enhance efficiency and safety, thereby driving the market.

The COVID-19 pandemic hindered the market, due to lockdowns imposed by several governments all across the globe. The production activities were stopped, as workers were not able to work on-premises for the risk of infection. additionally, the supply and distribution were also disturbed, which caused a market slowdown. However, the market is anticipated to have a significant boost in the post-pandemic scenario.

Impact of Artificial Intelligence (AI) in Chemical Transportation Market

The use of artificial intelligence is likely to provide substantial propulsion to the chemical transportation market. AI helps to enhance quality control and to significantly improve safety. The implementation of machine learning accelerates the innovation process and facilitates predictive maintenance. AI raises the efficiency by automating and optimizing the operations, leading to high productivity.

Chemical Transportation Market Dynamics

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Major Drivers

Rising demand for chemicals across various industries is expected to drive the market during the projection period. The high demand for chemicals in different industry verticals, including pharmaceutical, specialty chemicals, chemical, oil & gas, cosmetic, and food & beverage. The chemical industry has seen a significant rise in recent years. Consequently, chemical transportation activities have grown, leading to major propulsion for the market.

• As per a survey published in August 2023, chemicals are being used in the manufacture of tens of thousands of various products that are crucial to modern life. In 2021, the total revenue generated by the chemical industries across the globe was close to USD 4.7 trillion.

Existing Restraints

Complexities associated with chemical logistics are likely to hamper the market during the forecast period. Chemical transportation companies specialize in moving goods through roadways, railways, airways, and seaways.

However, it comes with different complexities, such as uncertain transit times, an overburdened rail network, poor road quality, insufficient flexibility in chemical transportation with various specifications, and the danger of pilferage. These challenges pose a significant obstacle to the growth of the chemical transportation market.

Emerging Opportunities

­Growing demand for logistics services driven by technology is anticipated to provide substantial opportunities for the market. Chemical manufacturers are increasingly investing in modernized green warehouses and automation to reduce environmental impact and improve energy conservation.

This has led to an increase in the demand for cost-effective warehousing solutions that incorporate green practices and advanced technology such as smart sensors, the Internet of Things (IoT), and robotics. Vendors are also providing digital tools to automate chemical logistics and data processing, improving efficiency and productivity.

Scope of the Chemical Transportation Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Chemical Transportation Market Segment Insights

Transportation Type Segment Analysis

Based on transportation type, the chemical transportation market is divided into railways, roadways, airways, pipelines, and waterways. The roadways segment is projected to hold the major share of the market during the projection period, owing to the easy access to locations such as chemical plants and industrial complexes, allowing for efficient transportation of chemicals.

Road transports are usually highly cost-effective for short to medium-distance chemical shipments. Additionally, road transportation offers flexibility in terms of schedules and routes, making the shipping process easy and allowing for bulk transfer in several batches.

Service Segment Analysis

On the basis of service, the global market is segregated into storage & warehousing, transportation & distribution, customs & security, consulting & management services, green logistics, and others. The transportation & distribution segment is projected to register a high CAGR during the forecast period, as it offers safety and compliance in the handling of hazardous chemicals.

Specialized equipment, well-trained personnel, and proper safety protocols are provided to ensure the prevention of accidents. The transportation & distribution networks enable chemical companies to reach customers globally. Consequently, this segment is likely to experience a major surge in the coming years.

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End-use Industry Segment Analysis

On the basis of the end-use industry, the chemical transportation market is segmented into the cosmetic, chemical, oil & gas, pharmaceutical, food, specialty chemicals, and others. The oil & gas industry segment is anticipated to register a robust growth rate during the forecast period, owing to the fact that this industry relies on chemical transportation for securely moving crucial chemicals such as corrosion inhibitors and drilling fluids from one place to another.

This ensures the uninterrupted operation of oil and gas facilities. The downtime is significantly reduced, due to the optimized logistics. This is helping to maintain cost-effectiveness, which, in turn, is expected to boost the segment in the market during the forecast period.

• According to a survey report published in September 2023, the total revenue generated by the oil & gas industry in the US in 2022 was approximately USD 332.9 billion. This was a substantial rise in comparison to the total value in 2021, which was USD 211.2 billion.

The pharmaceutical industry segment is estimated to experience a significant surge in the coming years, as chemical transportation allows for secure and timely delivery of raw materials that are essential for drug manufacturing. This streamlines the production process by ensuring a constant supply chain. Consequently, there is no product shortage or production disruption, thereby propelling this segment during the forecast period.

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Regional Outlook

In terms of region, the global chemical transportation market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the global market during the projection period, due the presence of developing economies such as India and China in the region. These countries focus on the manufacturing sector and develop robust warehouse infrastructure, which is expected to boost the market in the coming years.

In Europe, the petrochemical industry is expected to see a significant rise, driven by an increase in ethylene output in countries such as France, Germany, and the UK. The increase in manufacturing activities across this region is raising the overall chemical consumption by various manufacturing processes and is propelling the demand for chemical transportation.

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