Logistics

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Last Updated 6th January 2024.

How much funding is the Logistics Sector forecast to receive in 2023?

Funding to the Logistics sector is forecast to be between $295m and $404m in 2023. Our central estimate is $343m. For reference, the Logistics sector received $433m last year.

This forecast is based on our 95% probability range. In other words, we are 95% sure that funding will be between $295m and $404m. 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 $324m and $364m.

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. 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 highly likely to reach 50% of the funding requirement. On the other hand, we think there’s only a remote chance that the sector will receive 75% of the funding required.

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How does the 2023 forecast compare to previous years?

The funding received by the sector has remained relatively stable, but in line with many other sectors, jumped quite a bit in 2022. In the subsequent years from 2016 (which was an outlier), funding to the sector fluctuated between $189m and $286m, which is quite consistent over time.

However, funding jumped to $433m in 2022, and the funding gap closed to only 26% which is one of the best when looking across all sectors.

Our forecast for 2023 shows the sector somewhere in the region of the last years. We’re forecasting that the Logistics sector will receive between 46% and 63% of the current funding requirement.

The funding requirement has climbed in recent years and now stands at a record $643m needed – 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.

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 2023, 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 remote chance that the sector will grow in 2023 (close the funding gap), thus the sector is almost certain to record a year of a growing funding gap meaning it could go into a real humanitarian recession in 2025.

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How does the 2023 forecast compare to other sectors?

The Logistics sector is set to be ranked around ‘mid-table’ as the 12th most well-funded sector in 2023, but well behind the top tier of humanitarian sectors (i.e. those sectors from Education upwards).

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The current state of things

By the end of December 2023, funding to the sector is tracking funding levels from previous years ($252m), although slightly below the level at the same point in 2022 ($298m).

The notable feature of the curves in the graph above is the substantial amounts of funding that the sector receives in the second half of the year. A cursory look at the 2021 and 2022 lines points towards funding accelerating in the latter half of the year.

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Features of the Logistics sector in 2022

The average Logistics response was funded at 86% of what was required in 2022. This is the highest of any sector, just ahead of Coordination and Support Services (77%).

On the positive side of the spectrum over half of contexts received 50% of their funding requirement. These include ten contexts that reached their funding requirement, namely: Lebanon, Ukraine, Madagascar, Ethiopia, Haiti, the Rohingya plan, Mozambique, Somalia, Pakistan and Niger. However, 7 out of 26 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?

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