Digital Logistics Market

Digital Logistics Market 

The global digital logistics market size was more than US$17 Bn in the year 2021. With unprecedented penetration of digitisation and automation in logistics and warehousing, it is anticipated that the market will experience stupendous growth in revenue over the upcoming years.  

Market Analysis in Brief

Digital logistics is more popularly understood as the automation and digitisation of procedures involved in the movement of goods. Routine logistical operations that typically rely on pen and paper, and repetitive manual effort hold the largest potential to be subject to automation, and digitisation. This is where digital logistics comes into play. According to NITI Aayog, the Government of India emphasized IoT, AI, and Big Data in 2019 to overhaul the country's supply chain and logistics business, spending 100 crores in Indian Rupees in the field, which is boosting the country's total need in the digital logistics market space. The demand for cost-effective logistics and supply chain solutions is setting the stage for the digital logistics market. In addition, the market for digital logistics will receive an impetus from the rapidly increasing need for fleet and warehouse management systems.

Some of the other significant factors driving the expansion of the digital logistics market include evolving data analytics technologies and tools that logistics companies are rapidly adopting, growing penetration of the e-Commerce industry, and enhancement of delivery capabilities using drones and digital trucks for carrying out shipments. Furthermore, digital logistics plays a catalyst in improving communication among the various internal and external stakeholders while decreasing the data silo effect, and creating profitable potential for business growth.

Key Report Findings

• The digital logistics marketplace evaluated at around US$17 Bn in 2021 and is all set for an exploding growth outlook in upcoming years
• Escalating demand for warehouse and fleet management systems drives the penetration of digital logistics
• Cloud-based deployment preferred among end-use verticals
• Demand for digital logistics solutions higher
• IBM, Oracle Corporation, SAP, Intel, and HCL Technologies represent some of the top players in the digital logistics market

Growth Drivers

Brisk e-Commerce Expansion

Over the last decade, the rise in online purchases and the number of Internet users has fuelled the e-commerce industry's exponential expansion. This bodes well for the performance of digital logistics market. Given the upsurge of e-commerce activity, the logistics providers ought to work faster and more efficiently to be able to cater to small individual demands. Online shoppers expect order accuracy, same-day or same-hour delivery, and free returns. The e-Commerce companies are seeking reduced order delivery times and operational costs.

The e-Commerce sector drives transparency, cost, convenience, and speed in delivery, as well as appealing frictionless returns. To address this need, new business models and solutions must be developed based on digitisation of logistics operations, automating material handling systems, warehouse management systems, and distribution management systems. This has resulted in speedier and more diverse fulfilment services, particularly in terms of last mile delivery alternatives and smooth returns processes.

Rising Demand for Fleet Management Systems

There is an increasing requirement to control the rising logistics and supply costs because of the globalisation of supply chains and freight logistics. Different freight organisations can efficiently control a range of costs by utilising intricate digital logistics solutions for labour, transportation, fleet, and warehouse administration. Therefore, during the forecast period, the globalised supply chain and freight logistics are driving up demand for warehouse and fleet management systems, among other products.

Fleet management tools used in commercial vehicles are progressing technologically and are likely to increase at a higher rate during the projection period. The rise of linked automobiles is likely to promote key activities of the digital logistics market growth. The worldwide fleet management market is still in its early stages of development. The fleet management market is being propelled by an increased awareness of the benefits of fleet management systems in fleet enterprises. The use of new technology during the industrial revolution has also contributed to the rise of fleet management.

Growth Challenges

Lack of Standardisation in Fragmented Logistics

Lack of governance is one of the biggest growth barriers in terms of the mainstream adoption of digital logistics. A logistics IoT standard must be established due to the highly fragmented nature of the logistics industry. To sustain revenue and viability, international transportation and logistics companies are concentrating on improving supply chain management and efficiency. Keeping governance as uniform as possible is essential because having one authority for each field would require clarification.

On the other hand, high performance would lead to end-to-end improvements in both linked devices and integrated systems. Connectivity standards facilitate data transfer as MTConnect, EtherCAT, and Master Control System-Distributed Control System (MCS-DCS) Interface Standardization. The bulk of solutions could easily be delivered by each service provider in a single bundle thanks to a standardised logistics and supply chain infrastructure.

Overview of Key Segments

Cloud Segment Continues to Grow Prominent

Based on the deployment model, the cloud segment of the digital logistics market is likely to grow faster in the upcoming years. Various enterprises all over the world are leveraging cloud-based solutions and apps. The main advantages of cloud services include their flexibility, capacity to grow their applications, and simple management capabilities. The use of cloud services among SMEs is due to strong rivalry and the need for more resources seen in large organisations.

On the other hand, large organisations are cost-conscious about these solutions, prompting them to boost their use of cloud-based software. Because of cloud-based services, digital logistics solutions are delivered in a customised manner based on business requirements, resulting in higher customer satisfaction.

Solutions Remain Sought-after with Increased Demand for Data Management

Based on the analysis of the digital logistics market based on components, the solutions segment is further divided into asset management, warehouse management, data management analytics, security, and network management. Data management solutions enable IoT devices to collect massive amounts of data and extract insights from raw data, thereby improving industry efficiency. As a result, manufacturers provide data management solutions to manage structured and unstructured data to extract insights from large amounts of data.

Data management operates in six steps, viz., data identification, data gathering, authentication, storage, analysis, and information generation for decision-making. With the help of advanced IT solutions, this data might be converted into critical information and insights, resulting in increased efficiency, production, and profitability for enterprises. A real-time loT analytics solution influences remote management and monitoring while also gaining insights from faraway devices. It also detects data irregularities and generates error alarms.

Growth Opportunities Across Regions

Asia Pacific Dominant Market with High-growth Economies

On account of the inclusion of high-growth economies like China, India, and the Philippines, the Asia Pacific region registered the largest share of the digital logistics market in 2021 and will retain its primacy over the projected period. Low market entry costs, lesser risk, relatively easy and cheap market expansion, and rapidly growing accessibility of the latest technology mark only a few advantages of the data logistic systems for Asian markets. The logistics industry today contributes notably to the economic growth of Asian frontrunners like India. 

A strong logistics industry is anticipated to significantly aid India's efforts through programs like the government-sponsored Make in India initiative. Furthermore, a unified production base is sought after by many essential actors. The industry has experienced tremendous expansion with the government's increased projected spending, improved infrastructure, and improved access to international markets. Because of its strong economies, Asia Pacific continues to be a growth engine for industries.

Global Digital Logistics Market: Competitive Landscape

A few of the digital logistics market participants include IBM, Oracle Corporation, SAP, AT&T, Intel, HCL Technologies Limited, Huawei Technologies Co., Ltd, Honeywell, and Blue Yonder.

Notable Developments

• In May 2019, Oracle Supply Chain Management (SCM) Cloud logistics management upgrades were released by Oracle. To assist customers in achieving better business outcomes by enhancing supply chain responsiveness, optimising shipments and asset utilisation, and increasing productivity across global supply chains, the updates included a new logistics network modeling product and improved transportation management and global trade management capabilities
• In January 2020, Infosys teamed with GEFCO to help its journey toward digital transformation. The latter has been a global pioneer in multimodal supply chain solutions, as well as an automobile logistics leader across Europe
• In May 2020, Intel teamed up with Smart Navigation Systems to offer the Intel Connected Logistic Platform, which will aid in the development of intelligent solutions for a variety of industries and use cases, including logistics and supply chain management, freight management, and warehouse management
• In June 2020, IBM debuted the IBM Sterling Inventories Control Tower to assist businesses better manage inventory and establish resilient supply chains. The IBM Sterling Inventory Control Tower has been equipped with Al to assist enterprises in seeing, predicting, and acting on inventory to better foresee disruptions, increase resiliency, manage exceptions, and respond to unplanned events
• In July 2020, ORBCOMM Inc., a global IoT solutions provider, launched its next-generation analytics and reporting platform with enhanced features such as advanced data insights and a dynamic user interface, allows customers to have a unified view of their transportation assets via a single sign-on

Regional Classification of the Global Digital Logistics Market is Described Below:

North America

• U.S.
• Canada

Europe

• Germany
• France
• Spain
• U.K.
• Italy
• Russia
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Southeast Asia
• Rest of Asia Pacific

Latin America

• Brazil
• Mexico
• Rest of Latin America

Middle East and Africa

• GCC
• South Africa
• Rest of Middle East and Africa

*Regions and countries are subject to change based on data availability

Key Elements Included In The Study: Global Digital Logistics Market

• Digital Logistics Market by Product/Technology/Grade, Application/End-user, and Region
• Executive Summary (Opportunity Analysis and Key Trends)
• Historical Market Size and Estimates, Value, 2018 - 2022
• Market Value at Regional and Country Level, 2023 - 2030
• Market Dynamics and Economic Overview
• Market Size in Value, Growth Rates, and Forecast Figures, 2023 - 2030
• Competitive Intelligence with Financials, Key Developments, and Portfolio of Leading Companies 
• Regional and Product/Grade/Application/End-user Price Trends Analysis
• Value Chain and Five Force’s Analysis
• Regional/Sub-region/Country Market Size and Trend Analysis
• Company Market Share Analysis and Key Player Profiles

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