Dangerous Hazardous Goods Logistics Market

The global dangerous/hazardous goods logistics market is expected to register an astounding CAGR of 6.37% by the end of review period. The growth is mainly attributed to augmenting demand for oil products and other flammable liquids across the world. Also, significant growth of healthcare and pharmaceutical industries is likely to bolster the market growth during the review period. However, presence of stringent regulations is likely to slow down the growth of dangerous/hazardous goods logistics.

Flammable liquids consist of adhesives, alcohols, acetone, paints, gasoline, aviation fuel, diesel, liquid bio-fuels, shale oil, gas oil, petroleum distillates, kerosene, resin, organochlorine pesticides, esters, benzene, methanol, ethers, copper-based pesticides, among others. Surging demand for flammable liquid including adhesives, ethanol, paints, resins, etc. is likely to bolster the market growth.

Asia Pacific is one of the major regional market growth due to the presence of robust chemical processing sector especially in China and India. Expanding industrialization and increasing globalization in the developing countries of Asia-Pacific such as India, Singapore, Malaysia, and Thailand coupled with rising per capita disposable income of the consumers is expected to augment the market growth substantially over the forecast period. Also, rising penetration of international chemical manufacturers in the region due to easy availability of cheap labor and raw material are bolstering the chemical industry growth. China is the largest chemical manufacturer across the globe, accounting for a whopping 44.6% of worldwide sales in 2021. It is expanding its chemical industry to the next stage of development and is shifting towards taking the lead becoming a major power in the chemical and petroleum industries. China is aggressively investing in trade and technology innovation and has gained a significant position in the international markets.

Moreover, the chemical and petrochemical sectors have been influenced by the record low oil prices in 2021. Lockdowns have led to lower demand for fuels, which resulted in lower production of various chemicals which are exclusively produced through coproduction process. Also, the demand for crude oil and gas declined amid the COVID-19. However, the oil & gas sector strongly rebounded throughout 2021, with rising oil prices. The demand is expected to rise significant in the coming years due to surging demand for oil products across different industries especially in emerging economies, which is likely to bolster the demand for chemical logistic services. Furthermore, after a 4% dip in 2021, the natural gas demand is likely to substantially recover in 2021 as consumption returns close to its pre-crisis level in mature markets, while developing countries benefit from lower natural gas prices and rebounding economies. In addition, significant dependency on OPEC countries for crude oil and petroleum distillates further propels the trading of oil products across geographies.

Considering the aforementioned factors, the demand for flammable liquids is expected to boost the demand for dangerous goods logistics market in the coming years.

Lithium batteries are commonly used in mobile phones, watches, laptops, cameras, toys, etc. comes under dangerous goods, as per IATA DG Regulations, since charged battery shipments can overheat and ignite under certain conditions. Also, lithium-ion batteries have established themselves as a major part of electric vehicle as they offer the best balance between cost, performance, weight, and size parameters. Today, the electric vehicles, especially the two wheelers, three wheelers, and cars are the biggest demand generator for lithium-ion batteries.

The International Energy Agency (IEA) has projected that the growth in EVs is likely to surge the lithium demand by more than 40 times by 2030 as per the International Lithium Association (ILiA). In 2021, the lithium demand was around 320,000 tons and is likely to hit 1 million by the end of 2025 and around 3 million by 2030.

Electric vehicles are gaining traction and are becoming more common on the roads as a mode of transportation. In addition, many automakers are focusing on electrification of automobiles to garner this opportunity. Over 10 million electric vehicles were present on road’s worldwide in 2021 alone with battery electric models boosting the market of EVs. With a substantial growth after a decade, the global electric car stock hit the 10 million mark in 2021, a 43% spike from the year 2019, which represented a 1% stock share. Moreover, battery electric vehicles (BEVs) held for around 65% of new electric car registration. China, the leading EV manufacturing country, has the largest fleet of 4.5 million electric cars. Although in 2021, Europe had the highest yearly surge to reach 3.2 million.

Thus, growing demand for lithium batteries in mobile devices and other electronic items coupled with augmenting electric vehicles are expected to offer immense growth opportunities to the industry players during the forecast timeline.

Dangerous goods transportation is a highly regulated sector which is mainly governed by national and international regulations as per the respective mode of transport. The purpose of these regulations is to prevent accidents to property and people as well as to the surrounding environment. Regulations generally include issues such as packaging requirement criteria, the maximum amount of product which can be transported, and the kind of goods which can or cannot be transported in the same transport unit. To ensure consistency between these regulations, the mechanisms for the harmonization of hazard communication tools and hazard classification criteria as well as for transport conditions for all modes of transportation has been provided.

For instance, in Europe, international dangerous goods by road are mainly subjected to International ADR Agreement, European Agreement concerning the International Carriage of Dangerous Goods by Road. And for countries which are separated from continental Europe by sea, the International Maritime Dangerous Goods (IMDG) code concerning international sea transports is also applied. The IMDG Code is accepted as an international guideline to the safe shipment or transportation of dangerous goods by water on cargo vessels.

In the US, The U.S. Department of Transportation (DOT), under the authority granted by Congress in the Hazardous Material Transportation Act (HMTA), enforces the Hazardous Material Regulations (HMR) which govern the safe transportation of hazardous materials in the country. The HMR are codified in Title 49 of the Code of Federal Regulations (49 CFR), Chapter I, Subchapter C, Parts 171-180.

Thus, these regulations can negatively affect the smooth transportation of dangerous goods in the domestic as well as the international market, which is expected to negatively impact the industry growth.