Published Date: May 2021
No. of Pages: 189
Report Code: EMR100322
The global Digital Logistics market was valued at 17.8 Billion in 2020 and is expected to grow at an attractive CAGR of 7.9 % over the forecast period 2021-2027 owing to the increasing adoption of advanced technologies in the logistics sector. Also, these digital solutions are assisting logistics companies in reducing incurred costs. Enterprises are willingly adopting digital logistics solutions for their day-to-day logistics and supply chain operations to better serve their customers. The increasing customer expectation, along with the measures to control the logistics cost, plays a vital role in shaping the future of the digital logistics market.
Convergence of logistics and technology, along with cloud-based collaborative solutions that extend through the entire supply chain, tight integration of warehouse, transport, and end consumer information, and transparency through the supply chain are driving the growth of the market studied. Growth in customer base, economic & political developments, an increase in the number of digital customers, and the rising era of IoT are some of the factors fuelling the growth of the global digital logistics market.
The supply chain industry is rapidly taken by the Internet of Things (IoT). In the upcoming years it is been estimated that IoT will have an impact on the supply chain and logistics. IoT enables the retail, transportation, and manufacturing companies to monitor goods in real-time and makes sure they are arrived in good condition and most importantly on the right place and time. IoT in logistics has several applications such as smart warehouse and wearables. Such a digital transformation in logistics is driving the growth of the digital logistic market. On the other side, lack of expertise in the field and technology constraints may hinder the growth of the global digital logistics market. Furthermore, advanced technologies including driverless vehicles and 3D printing may create huge opportunities for the market in the forthcoming years.
In 2019, the Indian Government has focused highlights on AI, IoT and Big Data to transform the supply chain and logistics industry in the country by investing INR 100 crore into the sector which is driving the demand for digital logistics market in the country.
In October 2018, Oracle, launched Oracle Blockchain Applications Cloud, a suite of services to enhance transparency in the supply chain. It is expected to help in tracking products in the supply chain on a distributed ledger, boosting the reliability of business transactions while accelerating the delivery process. The increasing demand for fleet and warehouse management systems is expected to augment the need for digital solutions in the logistics sector.
With the recent worldwide outbreak of covid 19, number of industries has suffered significant supply chain and logistic disruption owing to lockdown imposed by various government. To cope up with the essential deliveries that are stuck in between, different companies are modifying their existing supply chain capabilities with digital logistics platform. According to Logistics News, digital supply chains using artificial intelligence and enabling digital payments are the solution to deal with emergencies such as Covid-19 pandemic.
The key players active in the global market include IBM (US), Oracle (US), SAP (Germany), AT&T (US), Intel (US), Infosys (India), Honeywell (US), Eurotech S.P.A (Italy), HCL Technologies (India), ORBCOMM (US), Cloud Logistics (US), Freightgate (US), Blue Yonder (US), Digilogistics (China), WebXpress (India), Ramco Systems (India), Logisuite (US), Impinj (US), Intersec (France), ICAT Logistics (US), Magaya (US), Softlink (India), Samsung SDS (South Korea), Hexaware (India), Tech Mahindra (India), and Advantech (Taiwan). These players have adopted various strategies to grow in the global digital logistics market.
Digital logistics certifies that there is end-to-end visibility in inventory, orders, and shipments across the supply chain. It decreases network-wide inventory levels, increases customer satisfaction, and also responds dynamically to logistics events. There is a central command and control centre to have decision making process, also helps in making the system very efficient. There is increased visibility to performance metrics that helps in continuous improvement. All information is accessible online and allows people to filter information and gain comprehensive knowledge on problems if any.
Everything becomes easy with GPS tracking system. A parcel can be tracked in real time from anywhere in the world. A slight delay in the parcel’s path is known immediately to everyone concerned. And if there is need for rerouting, it can be done as soon as possible. With the advent of digital logistics, it has become very easy to eliminate loss of packages, wrong destination deliveries and package delivery failures. Weather conditions are predicted and deliveries are scheduled accordingly. From the moment the item is picked from the warehouse to the second it reaches destination; the entire path is charted digitally. There is no room for error.
One of the important factors in shifting to digital logistics is the need for flexibility to integrate with newer system to integrate with latest systems to communicate information, sync activities, and collaborate across processes. The incorporation of ground breaking research like data analytics, data sciences, and machine learning are used in logistics, along with the digital know-how, to enhance the technologies and processes.
Digital logistics is driven by a new generation of web-based, enterprise logistics applications that enable collaboration and optimization, leveraging a central logistics information backbone that provides visibility across the enterprise and extended supply chain. Digital logistics market can be segmented on the basis of solution, systems, end-use industry, and geography. On the basis of solution, the digital logistics market can be segmented into transportation management, warehouse management, logistics networks, and others. Furthermore, on the basis of system, the digital logistics market can be segmented into fright management system, truck management system, fleet management system, and others. On the basis of end-use industry, the digital logistics market can be segmented into Government, aerospace, defence, automotive, oil & gas, retail, manufacturing, healthcare, and others.
North America constitutes of developed economies, such as the US and Canada. North America is one of the largest contributors to the digital logistics market. The market growth in this region is driven by the presence of large IT companies and rapid technological advancements, such as digitalization in the US and Canada. Well-established economies of these countries enable the region to invest heavily in leading digital logistics solutions and services. Commercial transportation and logistics is the backbone of the North American economy. The digital logistics market in North America is undergoing moderate growth due to drivers such as the regulatory developments—Compliance, Safety, and Accountability (CSA) and Hours of Service Solution (HOS) revisions attracting the growth for the market. Retail, utilities, and service sectors are the top three fastest growing verticals, contributing to the adoption of digital logistics solutions.
According to a study by GSMA, the number of IoT connections in Latin America amounted to 526 million in 2018 and is expected to grow to 1,300 million by 2025. This depicts a strong growth rate in the number of connections in the region. Hence, these trends are expected to boost the adoption of mobile devices in the region.
Brazil recorded one of the highest logistics expenses in the world. Approximately 30% of the distribution cost structure represents the total logistics costs. The growing e-commerce industry is driving the demand for advanced and time efficient logistic services. In 2017, the sales of e-commerce accounted for 5% (USD 300 billion) of the Brazilian retail market share. However, this proportion is increasing rapidly, due to growing digital penetration.
In 2018, Amazon acquired a 50,000-square-meter warehouse for lease in Brazil, as the company is planning to expand its presence in the region. Though the country’s logistics market is facing many problems, with the increasing need for cost-effective methods, digital logistic solutions can be expected to witness demand from this sector.
In Argentina, with growing cloud adoption, the country’s trucking market is providing growth avenues for digital logistic vendors, as digital services are helping regional logistic companies in gaining competitive advantage. The country’s truck industry is worth USD 120 billion. Furthermore, with trucks that make over 150 million trips annually, the industry has a vast scope for digital logistic solutions. However, Asia-Pacific region is expected to grow at a significant rate due to the booming E-commerce industry, which is driving the digital logistics market.
By End-Use Industry
The Leading Key Players in Digital Logistics Market