Military Logistics Market size is anticipated to grow at lucrative CAGR during the forecast period due to rise in military activities across the globe. Military logistics can be referred to as a kind of transportation, supply chain or maintenance activity happening within the defense vertical. Responsibilities of military toward several operations, such as surveillance, reconnaissance, and quick response, pose the need for military logistics network.
The rise in cross border military trade and troops posting across several countries will generate a market demand for military logistics. Major countries including the U.S. and Russia have their military posts in various countries of the Middle East and Africa regions. In order to continue operations across borders, extensive logistics capabilities are required, supporting the market demand.
Responsibilities of military bodies to operate effectively in situations, such as disaster relief, regional crises, and medical emergencies, will also cater to the market demand for military logistics. Requirement to the situations within a limited timeframe as and when required requires elaborative logistics network, impacting market growth. For instance, in April 2020, a number of military forces across Europe were mobilized in response to Covid-19 pandemic. Germany mobilized more than 15,000 military troops to help local authorities tackle crises and impose lockdown.
Technological proliferation and amalgamation of various connected technologies will support market growth of military logistics. Various industry participants in association with defense bodies are trying to use drone and Unmanned Aerial vehicles (UAV) for military logistics. This will drastically reduce delivery time along with reducing the operational cost. For instance, in June 2019, the Chinese military successfully tested its unmanned transport plane, which delivered a cargo to a designated area. The project was carried jointly by National Defense university of People Liberation Army (PLA) and China Aerospace Science and Technology Corporation.
The military logistics market by mode of transportation is segmented into airways, seaways, and land ways. The airways segment is expected to witness lucrative growth rate over the forecast timeframe due to the introduction of various options including UAV in military logistics. The land ways segment will also witness growth rate that is attributed to the integration of various Unmanned Ground Vehicles (UGV) with logistics services such as Search and Rescue (SAR), military goods transportation, firefighting, and combat support.
The army within the end use segment of the military logistics market will cater to the significant share in market revenue due to its proliferated scope of application. Various army bases stationed at hostile environments are generating a continuous demand for military food supplies and other necessities, posing requirement of an effective military logistics network.
The Asia Pacific is expected to witness significant growth rate over the forecast timeframe due to increasing military activities across the region. Increase defense budget for acquisition of armaments, efforts by regional government to boost indigenous production capabilities in the defense sector, and establishment of various military bases within the country to safeguard borders are some of the key market drivers of Asia Pacific. For instance, India spends approximately 50 million per day for maintaining operations of Siachen base. The expense includes extensive aerial logistics activities including transportation of food, clothes, military arms, ammunitions, gears, and other important supplies.
Key players operating in the military logistics market are undergoing horizontal and vertical integration to increase their service offerings and providing one-point solution to various military organizations. Long-term fixed cost Indefinite Delivery Indefinite Quantity (IDIQ) contract is the emerging trend of the market, which will shape future growth opportunities. For instance, in June 2017, AECOM received five years cost plus fixed-fee price contract from the U.S. army worth USD 37.4 billion. This contract includes several strategic services such as system engineering, field operations, logistics, supply chain, and security services.
Major industry participants present in the military logistics industry include AECOM, ANHAM, Lockheed Martin, KBR, Dyncorp International, BAE systems, Thales group, Honeywell International Inc., ASELSAN A.S., Fluor Corporation, and Genco.
Market, By Mode of Transportation, 2015-2026 (USD Million)
Market, By End-use, 2015-2026 (USD Million)
Market, By Transport Type, 2015-2026 (USD Million)
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