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Last Updated 8th February 2023.
How much funding is the Logistics Sector forecast to receive in 2022?
Funding to the Logistics sector is forecast to be between $355m and $469m in 2022. Our central estimate is $403m. For reference, the Logistics sector received $282m last year.
This forecast is based on our 95% probability range. In other words, we are 95% sure that funding will be between $355m and $469m. Below are the other forecast ranges for the Logistics sector. As we become less sure about our forecast, the range narrows. So for example, we think there’s a 50% probability that funding will be between $385m and $424m.
But we need to put this into context. What does the forecast mean in terms of reaching the funding that is required for the sector (also known as the funding requirement)? The total funding requirement globally is determined by how much is needed in each context. Given that we don’t have the information yet we have projected the funding required for 2022 and compared that to the funding forecast. If you hover over the donut below you’ll be able to see the chances of reaching 25%, 50%, 75%, and 100% of the funding that is required.
On the positive side of things, the Logistics sector is almost certain to reach 50% of the funding requirement. On the other hand, we think that it’s unlikely that the sector will receive 75% of the funding required.
How does the 2022 forecast compare to previous years?
The funding received by the sector has remained relatively stable. 2016 is the outlier here, when the sector received $124m. In the subsequent five years, funding to the sector fluctuated between $189m and $283m, which is quite consistent over time. Our forecast for 2022 actually shows the sector outperforming previous year by a significant amount. We’re forecasting that the Logistics sector will receive between 61% and 80% of the current funding requirement.
The funding requirement has climbed in recent years – before this there were alternating years of increases and decreases in the funding requirement for 2016 to 2020. There appears to be the start of an upward trend over time, but unlike other sectors, it isn’t a straightforward upward trajectory.
In terms of why this might be, perhaps the sector is slightly more divorced from humanitarian need than other sectors (like Food Security or Health). Logistics, like Coordination and Support Services, is an enabler of humanitarian delivery, as opposed to the outcome we are hoping to achieve. This could be through the transport of people and cargo, storage, or coordinating common solutions for humanitarian actors (especially when there is a lack of access). As such, it is one step removed from ‘need’, but of course inextricably linked to an extent. There may be further support for this hypothesis when we consider that the Coordination and Support Services sector, which is also an ‘enabler’ of humanitarian deliver, was similarly decoupled from the overall upward trend in funding required across sectors.
At the same time, the funding gap to the sector has also fluctuated. The funding gap is a factor of both the funding requirement which has been quite bumpy, and funding received which has been quite consistent, thus we can deduce that the gap is largely a product of changing needs around logistics, and not the funding received in recent years.
We’ve come up with a way of looking at whether funding required is increasing faster than the funding received. In this story, we’ve defined a ‘real humanitarian recession’ as two consecutive years of a growing funding gap. The sector cannot go into recession as it closed the funding gap last year. Therefore, when looking at 2022, we’re looking at whether the Logistics sector will experience a growing funding gap, or another year of real growth.
We think there’s a 9 in 10 chance that the sector will grow in 2022, thus ensuring the sector is at least two years away from going into recession.
How does the 2022 forecast compare to other sectors?
The Logistics sector is set to be ranked around ‘mid-table’ as the 10th most well-funded sector in 2022, but well behind the top tier of humanitarian sectors (i.e. those sectors from Protection upwards).
The current state of things
By the end of December 2022, funding to the sector is ahead of all recent years, suggesting that it will be a good year for the Logistics sector.
Funding to the Logistics sector by the end of 2021 ($249m) was just above the levels of previous years at the same point in previous years ($197m to $220m). Funding to the sector appeared to tracking funding from previous years, and the Logistics sector had a particularly good Q4 in 2021.
Features of the Logistics sector in 2021
The average Logistics response was funded at 46% of what was required in 2021. This is the 3rd highest of any sector, behind only Coordination and Support Services.
On the positive side of the spectrum there were 11 contexts that received over 50% of their funding requirement. These include four contexts that reached their funding requirement, namely: the Haiti Flash Appeal (238%), Mozambique (155%), Nigeria (109%), and the Central African Republic (105%). However, just under half of contexts failed to receive even 25% of the funding requirement.
This graph raises many more questions than it answers. Why are some responses more funded than others, and why is there such inequity across contexts? In the coming months we will be measuring the inequity of the Logistics sector (and other sectors too). We’ll try to explain why there is inequity – could it be: underreporting in some sectors, donor preferences, a factor of the funding requirement size, or other reasons?
The biggest donor to the Logistics sector is the US Government, which contributed half of all funding to the sector. This is then followed by the Government of Germany (13%), ECHO (11%), and the Government of the UK (6%). Together, these four donors contribute 80% of all Logistics funding.
The Logistics sector isn’t hugely diverse in terms of the funding sources. One way to measure this is to use the Herfindahl Hirschman Index. On a scale of 0 to 10,000, a sector is highly concentrated if it has a score over 2,500. The Logistics sector has a score of 2,819 indicating a highly concentrated sector. The domination of one actor suggests that the sector may not be that resilient to weathering shocks. If one donor (in this case the US government) suffers a short term shock to funding, then there may not be enough significant sources of funding for the sector as a whole not to suffer.
In terms of the recipients of funding, WFP receives the vast majority of all Logistics funding (70%). This is then followed by UN Humanitarian Air Service (UNHAS) (11%). Other organisations receiving Logistics funding are a mix of international NGOs, but also specialist logistics firms.
Last year’s forecast can’t yet be judged against what the reality was as the 2021 numbers aren’t ‘final’ yet, despite it being 2022 already. It varies year-to-year, but there is still a non-trivial amount of funding that is logged after the end of the year. Therefore, we can’t really judge last year’s forecast until some point later in 2022. It’s at this point that we’ll do a post-mortem on our 2021 forecasts and see how well we did.
The usual health warning: FTS doesn’t capture everything. It is a platform that relies on voluntary reporting by organisations. But it is the most comprehensive source of data for humanitarian funding.
For forecast methodology, click here. We’ll be keeping a record of all our forecasts and success over time, which you can find here.
To find out methodology and sources for other things on this page which aren’t the forecast, click here.
Note: Numbers in ‘The current state of things’ graph may differ from elsewhere on the page as the data was extracted on a different date (13th January 2022) than other numbers that also show how much was received in 2022 (e.g. the column chart).