Connected Logistics help businesses become more customer-centric and efficient by increasing transparency in the business process. The Global Connected Logistics Market is expected to register a CAGR of 17.5% during the forecast period (2021 - 2026).
- Increasing adoption of IoT and sensor-based technologies like RFID in various domains, including the Supply Chain Management (SCM) system, will drive the connected logistics market in the forecast period.
- Advancement in future technologies like Big Data and Advanced analytics will act as a catalyzer for the adoption of Logistics 4.0. The data collected from smart and connected supply chain and logistics can be converted into actionable insights by using AI systems, which will help businesses to forecast demand accurately and thus improving capacity planning.
- Also, the growing demand for cloud-based solutions, RFID, and internet ubiquity across the globe are some more factors driving the market. The introduction of new applications and cloud-based solutions for the transportation and management of products, including tracking of goods and movement of planes, trucks, and ships which carry them. Further, the macroeconomic factors driving the market are the changing lifestyle of consumers, emerging economies, and the rapid rate of smart cities in developing countries such as China, Brazil, and India.
- In the United States, due to the COVID-19 outbreak, the government has shut down all the logistic operations in the country, which is heavily impacting the industry. The CEO of Connected Logistics has stated that, due to this outbreak, the American government has shown more flexibility towards telework and online assistance. These factors are expected to drive the market in the forecast period further.
Key Market Trends
Increasing use of IoT and future technologies in different industries will drive the adoption of Connected Logistics
- According to CISCO, global internet traffic from non-PC devices was 47% of total IP traffic in 2015 and will be 71% of total IP traffic in 2020. Also, Machine-To-Machine (M2M) connections will be half of the total connected devices and connections in the world by 2023 up from 33% in 2018. There will be 14.7 billion M2M connections by 2023.
- Verizon has conducted a survey in 2019 concluding that more than one-third of fleet managers who do not use fleet tracking solutions (fleet tracking solutions are mobile asset tracking solutions primarily fitted to trucks and other vehicles) say they would expect an increase in productivity if they implemented the technology. The survey also indicates that over 53% of companies that make use of asset tracking solutions reported actual productivity increases - with most of the respondents reporting positive growth in productivity (53% respondents) and compliance (52% respondents).
- Walmart is using IoT, machine learning, and Big Data to transform its retail operations and improve its customer experience in more than one ways. The company was one of the early adopters of RFID tags to track their inventories.
- In 2019, King County Department of Transportation, Washington DC, upgraded to Infor Inc's asset tracking solutions - CloudSuite EAM - to efficiently manage its 171 transit base structures/facilities and 1,500 buses. In total, the solution is estimated to track 46,988 pieces of in-service equipment that span across multiple departments and divisions.
Asia-Pacific Region to Exhibit Maximum Growth
- The Asia-Pacific region is expected to show robust growth in terms of revenue in the forecast period, significantly in the developing economies like India and China. Improvements in technology, increasing the use of sensors, and automation is certain factors expected to steer the market growth.
- For instance, China is the world's largest E-Commerce market, with over 50% of global E-Commerce transactions coming from China. According to Dezan Shira & Associates, in 2018, China's online retail sales reached USD 1.33 trillion and are forecasted to reach USD 1.99 trillion by the end of 2019. Also, in 2018, the number of digital buyers in China surpassed 560 million, with the total number projected to reach 634 million in 2020. Further, by 2020, China's E-Commerce market is predicted to be larger than those of the U.S., UK, Japan, Germany, and France combined. The growth of E-commerce industry in recent years in China is attributed to the developments in the internet infrastructure and establishment of global logistics networks.
- Also, in 2019, Singapore began transforming logistics to reinforce its place in APAC's logistics industry by integrating the technologies with the existing processes. The Singapore government has already started transforming logistics as part of its USD 4.5 billion Industry Transformation Programme. The primary objective of the program is to drive excellence in logistics operations and to be leaders in innovation, while also building a strong core of local logistics talent and making Singapore attractive to inward investment. This scheme is named the Logistics Industry Transformation Map (ITM) and follows similar plans for Singapore's food and beverage and precision engineering sectors.
The competitive landscape of the global connected logistics market is moderately fragmented owing to the presence of many existing as well as emerging players in the market. The technological developments in the logistics industry are expected to fuel the rise in investments and product innovations. The competitors are proactively addressing the challenges by crafting strategies that can have the best overall effect on the market's progress. The opportunities for growth in the market have ample scope for development in the forecast period.
- February 2019 - Intel announced the Intel Connected Logistics Platform (Intel CLP), a cost-effective internet of things (IoT) solution enabling users to monitor the condition and location of assets in any environment throughout the supply chain.
- February 2019 - Huawei released the Smart Logistics Solution during MWC 2019, aiming to help enterprises improve efficiency in fields such as transportation, distribution, and warehousing, facilitate agile innovation in the logistics industry, and achieve digital, information-based, and intelligent management.
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