Warehousing, Transportation, & Logistics Industry Report

The global warehousing, transportation, and logistics market is a dynamic, multi-trillion-dollar industry that continues to see strong growth and evolution. Logistics has become an integral and growing part of the global economy as its worldwide applications enable businesses to mark their presence in the global market.

The sector allows companies to store and transport resources such as equipment, inventory, food, and materials to the desired destination. It helps organizations create added value, save money, deliver a better customer experience, and improve brand standards.

Growth Drivers & Market Trends

Several factors are driving the warehousing, transportation, and logistics market on a global scale. One of the most significant factors is the popularity of e-commerce, which continues to grow as the availability of high-speed network connectivity grows. More and more consumers just want to shop online, and more home delivery options are available daily. This increases the demand for efficient logistics services.

The global logistics market is largely impacted by supply-side and demand-side trends. One of the major drivers of demand in the market is the rapid proliferation of trade agreements among various nations. Also, initiatives to increase global trade activities have expanded the demand for logistics to keep up with the needs of importers and exporters.

The sector has also benefited from recent technological advancements, globalization, integration, new legislation, and alliances. Technological advancements include automated material handling equipment, biometrics, robotics, and GPS. They enable businesses to work more efficiently, driving worldwide market growth. The continuing surge in e-commerce and online shopping also supports the market's growth. The pharmaceutical and food & beverage industries are also driving the market as they experience continued growth.

Many companies worldwide are looking to strategic logistics management to lower their transportation expenses. Companies now offer logistics monitoring systems integrated with advanced tech, such as blockchain, augmented reality, artificial intelligence, and the Internet of Things (IoT). These systems enable them to monitor real-time information and offer predictive alerts for warehouse management, transportation, and delivery.

Blockchain technology is enabling logistics companies to failsafe digital contracts; the technology allows them to seamlessly track logistics and assets and merge all documents related to the logistics of the company.

Through the use of artificial intelligence, shipped goods can be tracked to their exact location, a technology that helps to reduce transit time by nearly 50% compared to the traditional trucking industry. Also, cargo-monitoring technologies now include GPS trackers, RFID sensors, and Bluetooth technologies. Such tracking technologies allow the owners and receivers of products to track their packages in real-time using smartphone apps. These advancements, along with the development of self-service kiosks at warehouses to reduce manual paperwork and promote electronic data interchange technology, will continue to shape the market in the future.

Your Path to a Successful Sale Begins Here.

More companies are investing heavily in areas of cybersecurity as warehousing and distribution operations are becoming more digitized and interconnected. Cybersecurity threats are a key challenge with the widespread integration of IoT devices, cloud-based management systems, and automated technologies. All partners and vendors along the supply chain need to maintain high-security standards, including training, security audits, and advanced threat detection systems.

Logistics operations also benefit from the rise of "last mile" gig economy delivery. When a product leaves a warehouse, it is loaded onto whatever series of transportation vehicles is needed and delivered to a customer’s door. Last-mile delivery is the final step of the process. Last-mile delivery is the most expensive and time-consuming part of the whole shipping process. This is because the final leg of delivery usually involves multiple stops and low drop sizes, a problem that is further exacerbated in rural areas where homes are farther apart, and equally problematic in crowded cities where traffic slows the process. Last-mile delivery costs comprise 53% of the total cost of shipping. So, as the gig economy grows, retailers and logistics partners are using crowdsourcing technologies to connect directly with local, non-professional couriers who use their own transportation to make deliveries. This allows companies to get their e-commerce orders to customers faster and with lower logistics costs. And, with all the technology and integration with automation across sectors, it will not be long before we start seeing more robots, drones, and self-driving vehicles making deliveries.

There are different levels of logistics partnerships: 2PL (second-party logistics), 3PL (third-party logistics), 4PL (fourth-party logistics), and 5PL (fifth-party logistics). 2PL providers offer transportation services. 3PL takes transportation to the next level by offering integrated and outsourced services. 4PL becomes even more integrated, with a single point of contact for a client. 5PL focuses on supply chain management and logistics integration across multiple companies to optimize supply chains and cut costs.

The increasing emergence of 3PL and 5PL has increased logistics contribution on a global scale. Projections in terms of the value of these kinds of services are also expected to continue to increase.

Another trend for the market is that manufacturers are focusing on adopting green logistic solutions and ESG policies to reduce environmental impacts and improve their "green" reputations. Sustainability appeals to eco-conscious consumers, and it also benefits shippers by lowering fuel costs. Companies are exploring green alternatives such as electric vehicles, renewable energy, and sustainable packaging. Sustainable logistics are leading to better decision-making, and opening opportunities for optimization in procurement, route planning, and reverse logistics. 

M&A

Companies are investing heavily in supply chain technologies to improve technology and make better daily decisions. The transportation and logistics acquisition market is expected to see more activity, with market conditions likely to drive buyers and sellers to the table. Strategic investors will continue to engage in M&A deals as many organizations are still focused on strengthening supply chains following the pandemic.

Lower interest rates and improving market conditions are expected to drive an appetite for acquisitions, giving buyers more purchasing power as they look to expand geographically and add services and customers. Financial investors are also putting money into the sector to pinpoint growth opportunities and maximize portfolio returns.

The U.S. government previously earmarked hundreds of billions in federal funds to improve transit systems, airports, and passenger rail infrastructure. States have been dispersing these funds, which has impacted a wide range of companies that provide transportation systems.

In the maritime sector, improvements in fleet management continue to be a key trend, as the resilience of supply chains and the global logistic network remains somewhat ambiguous following the pandemic and amid geopolitical tensions.

Digital transformation will continue to provide new M&A opportunities as new platforms are developed and existing ones are consolidated. Autonomous technology will also continue to develop.

Schedule a Call