- Despite global trade headwinds, global express market is poised for a robust growth of 7.9% CAGR in 2025-2029F, with Asia Pacific as the key growth engine
- While UPS withheld guidance for a second straight quarter, FedEx reinstated FY26F guidance after posting its strongest revenue growth since the pandemic; Portfolio diversification and efficiency gains drive outperformance of Chinese peers
- Global logistics giants remain steadfast on enhancing profitability amid evolving trade dynamics, while prioritising capital returns
- Chinese peers to see brighter prospects ahead, as regulators’ strong opposition to “involutionary competition” paves the way for regional price hikes and a more rational market environment
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Strong growth trajectory with Asia Pacific serving as key engine. The International Monetary Fund (IMF)’s latest forecasts (as of Oct 2025), point to global GDP growth decelerating from 3.3% in 2024 to 3.2% and 3.1% in 2025F and 2026F, respectively. Similarly, the IMF has revised down its projected world trade volume growth to 2.9% in 2025-2026F (vs previous projection of 3.3% in Oct 2024), reflecting the impact of persistent trade restrictions.
Despite headwinds in the broader logistics market from the evolving global trade dynamics, the global express market is well-positioned to sustain robust growth. The sector is projected to grow at a 7.9% CAGR in 2025-2029F, following an elevated 8.8% y/y in 2025F. This momentum is primarily driven by the robust B2C segment, which is projected to grow at a substantial 10.8% CAGR (vs. a sluggish 2.5% CAGR for B2B segment). Notably, the Asia Pacific region is expected to serve as a key engine with a strong CAGR of 10.5% in 2025-2029F (vs. 6.0%/5.9% CAGRs from North America and Europe). The region is expected to consolidate its position as the largest contributor at 45% of global market by 2029F (vs. 33%/17% from North America and Europe).
Global logistics majors demonstrated divergent performance. UPS posted weaker-than-expected 2QFY25 results as operational challenges weighed on margins, prompting management to withhold guidance for a second straight quarter. In contrast, FedEx reported its strongest revenue growth since the pandemic and reinstated FY26F full-year guidance in Sep 2025, signalling improved visibility despite global trade uncertainty.
In China, competitive intensity remained elevated through 1HFY25 until regulatory intervention in Jul 2025 to curb aggressive price cutting. ZTO Express, which mainly targets the domestic e-commerce parcel market, came under pressure, posting softer 2QFY25 results with sharp gross margin contraction and lowering its FY25F parcel volume outlook. In contrast, SF Holding delivered record 1HFY25 net profit on the back of portfolio diversification and efficiency gains. J&T Global Express also benefited from a broader geographical footprint, gaining market share in 1HFY25 as EBITDA expansion in Southeast Asia and New Markets more than offset contraction in China.
Favour Chinese logistics players at this stage. Chinese logistics players appear better positioned to capture upside, while global peers’ disciplined focus on profitability and shareholder returns should help mitigate downside risk. Global leaders such as UPS and FedEx continue to prioritise revenue quality and cost efficiency, shifting towards higher-margin services and productivity gains. Their strong commitment to shareholder returns provides stability amid softer trade environment, with FedEx planning a 5% dividend increase in FY26, its fifth consecutive hike. UPS is also announcing a USD1.0bn share buyback alongside USD5.5bn in dividends.
In contrast, Chinese peers are benefiting from strong export momentum despite trade frictions, supported by successful trade diversification and robust cross-border e-commerce demand. Regulatory intervention since Jul 2025 is expected to gradually rein in excessive price competition, paving the way for a more rational market structure and a clearer path to margin recovery.
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