E-commerce Boom Propels Growth In Logistics Industry

Published Date : 04 May 2023

The global logistics industry revenue will attain around USD 18.23 trillion by 2032 from USD 10.68 trillion in 2022 and is poised to grow at a CAGR of 5.48% from 2023 to 2032.

As the e-commerce business expands, there is a growing need for efficient transportation services. Additionally, a change in consumer inclination toward internet transactions is propelling the industry.

Market Growth:

In business, logistics refers to the planned transportation of goods and, occasionally, of persons. The phrase originally applied to the military but eventually came to refer to commercial operations. "the process of organizing, carrying out, and overseeing the smooth, orderly flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customer requirements." The definition is restricted to commercial businesses by the last few lines. After taking into account all the connected activities that are taken into consideration when making choices about moving things, logistics can also be thought of as transportation.

Large companies might have a separate set of divisions that offer supply chain services like packing, shipping, storage, and distribution. Sometimes firms can contract with other organizations to provide these services. In order to optimize the chance in terms of return on value and economic wealth generation, logistics analysis examines each step of this process.

Regional Snapshot:

In 2020, the overall expense of logistics worldwide increased to nine trillion dollars. That amounts to 10.7% of the 85.24 trillion U.S. dollars in worldwide Gross Domestic Product (GDP) for that year.

The biggest transportation industry in the world is in the Asia-Pacific region, with an industry value of about 3.9 trillion dollars in 2020 alone. The growth of trade networks and the relocation of industrial output to Asian nations are credited with the region's leadership. For instance, the number of container trades within Asia, which totaled 41.5 million TEUs in 2021, exceeded that of all other trade lanes worldwide.

In 2021, there were 65.6 million metric tons of aviation freight logistics flow worldwide. By 2022, that number is expected to rise to 68.4 billion metric tons. Based on local and foreign freight metric ton-kilometers, FedEx, UPS, and Qatar Airways are the top three air freight companies. Supply chain disruptions had a negative impact on global maritime transportation, as shown by the 10.65 billion metric tons less seaborne commerce transit capacity in 2020. It's interesting to note that in 2020, 1.85 billion metric tons of cargo were placed on container ships, remaining constant from the pre-pandemic era.

Logistics Industry Report Scope:

Report Coverage Details
Market Revenue in 2023 USD 11.27 Trillion
Projected Forecast Revenue in 2032 USD 18.23 Trillion
Growth Rate from 2023 to 2032 CAGR of 5.48%
Largest Market North America
Base Year 2022
Forecast Period 2023 to 2032
Regions Covered North America, Europe, Asia-Pacific, Latin America and Middle East & Africa

Future Trends of the Logistics Industry

  • Integrations and networks built on the cloud - As new cloud-based systems and integrations continue to be created and distributed, logistics companies are now able to streamline their processes, store and transmit information more quickly and safely, and even have greater control over their funds. Some financial service companies have intervened to help carriers with specific technology connections and speed up payment.
  • Autonomous Vehicles - While tech aficionados have long discussed the potential of autonomous cars, in many respects, these robotic transit systems already exist. It's already possible for autonomous trucks to operate under "supervised autonomy," and it's only a question of time before this monitoring is no longer required. Autonomous vehicles have the potential to be safer, more affordable, and simpler to operate than manually operated vehicles if they are properly built and evaluated.
  • 3D modeling - Despite the impression that 3D printing is only for makers, major logistics companies have already begun to use this quickly evolving technology. When a connected 3D printer can send a product immediately, why waste a week transporting it across the country? Thanks to 3D printing, the supply chain will soon be much faster and more interconnected, requiring logistics firms to adjust.
  • Machine learning and AI - Additionally, logistics firms are anxious to incorporate more machine learning and artificial intelligence (AI) into the systems, which will decrease the need for staff time while boosting productivity and overall capabilities. Business experts can quickly assess output, shipping speed, customer happiness, and other crucial factors - and regularly self-improve to boost revenue - with the right tech tools in place.
  • Blockchain - Decentralized ledgers and more intelligent inventory management are two advantages that the transportation sector is enjoying as a result of blockchain technology, which powers cryptocurrencies. While often difficult and costly to adopt, blockchain technology has the potential to improve the security, effectiveness, and dependability of all monitoring and data management methods. Blockchain technology has a seemingly limitless future because it is so adaptable and is still developing in terms of skills.

Market Dynamics:

Drivers: The logistics business is being driven by the growing e-commerce sector

The foundation of eCommerce companies is logistics. The complexity of logistics administration for online shops has increased with the growth of eCommerce in recent years. And with appropriate inventory and supply chain management, you can surf this complicated surge. Modern consumers desire a streamlined and easy purchasing process. To scale up your eCommerce company, you should optimize your transportation process. Consequently, it is essential to give your customers a first-rate encounter. This book will shed light on contemporary logistics services to boost your eCommerce logistics and advance your company.

Logistics for e-commerce generally refers to the storage and delivery of goods from the producer to the final consumer. Every eCommerce company depends on the administrative procedure. Moving large amounts of inventory from the producer to the final customer's location is the first step in the eCommerce transportation process. This involves picking, packing, and shipping online purchases as well as inventory administration.

Restraints: Government interventions

Transportation and logistics businesses all over the world are focusing on enhancing supply chain effectiveness in order to increase revenue and viability. The transportation industry needs common control standards.

The degree of global transportation uniformity in European countries like the United Kingdom, Germany, and France has been hindered by a lack of government participation and the absence of regional groups that could actively initiate and organize these activities. Due to the widespread standardization of transportation management, every provider is able to provide the majority of solutions in a single bundle.

Opportunities: Valuable insights and faster product return

You can obtain up-to-the-minute insights into your last-mile operations by using contemporary reporting and measurements. Because it tracks driving performance, Upper can assist you in making wiser choices.

You can get a general idea of how many tasks were completed generally and how well your chauffeurs handled their allotted tasks with the help of end-of-day reports. Depending on the company's success metrics, you can then adjust, enhance, or maintain your plan.

Every eCommerce seller suffers from inventory refunds. It's an expensive, time-consuming procedure that could hurt your company's sales. It's now simpler than ever to get goods returned from consumers thanks to contemporary eCommerce shipping solutions. Route planners like Upper can simplify your delivery process by dispatching all delivery jobs more quickly and using rapidly optimized paths, so you can quickly put those returns back into stock.

Transportation Type Insights:

The most important component of the logistics network is transportation because it connects the various steps in the logistics process and guarantees the timely distribution of goods to customers. The entire logistics process from production to client dispatch to the refund order procedure requires transportation. The logistics system has no chance of producing its maximal production without a well-developed transportation system.

Effective planning and collaboration are needed to get the most out of the transportation system. Additionally, shipping accounts for a sizable part of the logistics expenses. So, in logistics, proper method and service selection for conveyance becomes crucial.

The operations area uses four different forms of conveyance for shipments. These include cars, buses, railroads, and ships. Depending on the needs of the company, logistics uses all four of these forms of transportation. The speed of delivery has a big impact on the method of conveyance.

  • Trucks are the primary mode of conveyance on the roads.  In rural regions with a lack of other transportation options, it is one of the most affordable methods of moving products and is helpful for moving services.
  • One of the most popular and significant modes of transit is rail.  It is the method used to efficiently transport heavy objects over long distances.
  • Air freight transit is the movement of goods from one location to another within a nation or around the globe using aircraft.
  • As the source of transit in logistics for foreign trades, maritime transport boosts a nation's economy. As a result, it plays a major role in the nation's transit system.

Logistics Type Insights:

Third-party logistics (3PL) is the term for contracting out your supply chain management and transportation activities to a third-party business. Companies that provide third-party logistics (3PL) services provide a broad variety of services to various sectors, including shipment, storage, inventory management, and transportation. A 3PL business also provides value-added services like bespoke packing, labeling, returns management, customs trading, and supply chain advice in addition to these basic services.

The primary goal of 3PL firms is to increase business effectiveness and streamline supply chain processes for your company. Your e-commerce business can gain from economies of scale, specialized knowledge, and a massive network of carriers and storage facilities by outsourcing logistics operations to a 3PL firm.

End-User Insights:

To satisfy the requirements of consumers or clients, industrial logistics is the process of organizing, carrying out, and managing the movement of resources and materials between the point of inception and the site of consumption. It involves managing the flow of goods-related tasks such as distribution, storage, and transit.

The complete supply chain from the procurement of raw materials, manufacturing, and distribution, to the dispatch of the finished product to the customer is included in it. The efficacy and efficiency of the operation as a whole can be greatly impacted by industrial logistics, which is an essential component of the production process.

Recent Development

  • In November 2022, United Parcel Service Inc. purchased the Bomi Group, a business with a focus on temperature-controlled shipping and storage in Europe.
  • In January 2020, H. Robinson invested $225 million in Prime Distribution Services. The purchase gives the company retail aggregation services like delivery, shipping, and inventory management. It also includes 2.6 million square feet of storage space.

Major Key Players:

  • United Parcel Service Inc. (UPS)
  • DSV (DSV Panalpina)
  • Robinson Worldwide Inc.
  • Kuehne+Nagel
  • Nippon Express

Market Segmentation:

By Transportation Type 

  • Airways
  • Waterways
  • Railways
  • Roadways

By Logistics Type 

  • First Party
  • Second Party
  • Third Party

By End User 

  • Industrial and Manufacturing
  • Retail
  • Healthcare
  • Oil & Gas

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