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E-commerce is one of the fastest growing sectors when compared to other business sectors, Coronavirus pandemic has accelerated the e-commerce growth to 25% in 2020 compared to the previous year.
The pandemic has forced e-commerce onto many consumers who have rarely or never shopped via the Internet previously and expanded the use of current digital shoppers.
Retail e-commerce takes the lion’s share in the total e-commerce sector, the total sales in this sector has reached $ 3.9 Trillion and this is expected to reach $ 6.8 Trillion by 2030 with a year-on-year growth of 12%.
Most of the large e-commerce are marketplace models like Amazon.com and Alibaba who have transformed their business to an e-marketplace connecting large pool of customer with vendors across nations and even cross border. Third party logistics service providers are trying to grab as much as market share provided by these marketplaces.
E-commerce logistics market can be segmented as follows:
The global e-commerce logistics market is expected to grow at the rate of CAGR XX% by the year 2024 to be worth $XX billion.
The number of companies investing in the e-commerce business is increasing which increases the outreach of existing companies and enhances the growth of the market.
The logistics companies have been implementing innovative technologies to expand their business and offer a greater number of delivery options.
The most recent trends used by logistics companies are drone-based delivery systems, GPS enabled tracking orders which helps the customer to track orders, tie-ups with local vendors to deliver products on the same day.
Generally, e-commerce companies sign agreements with logistics companies to enable widespread delivery systems which help them in efficiently monitoring and managing their services.
Amazon has established a new standard, with many customers expecting things ordered online to arrive within 48 hours. Other major retailers, such as Target and Walmart, are now competing with Amazon by making two-day shipping a basic feature of their platforms.
Organizations will need to invest in their warehouses and distribution centers, as well as boost the development and implementation of innovative supply chain and logistics systems, to keep up with increased demand from e-commerce channels and match consumer expectations.
New technologies like augmented reality, drones, advanced robotics, and smart glasses for hands-free pick, pack, and ship are essential for lowering costs and ensuring the company’s competitiveness and customer satisfaction.
The ongoing rapid growth of e-commerce marketplaces will necessitate a similarly quick and imaginative response from the transportation and logistics industries. To be competitive in today’s market, businesses must invest in predictive software that is based on inventory sensing and linked to customer browsing and product interest in order to manage and expedite warehouse procedures.
Software-driven improvements, such as AI/ML, drones, autonomous machines, and analytics, will improve order fulfilment time, minimise inefficiencies, and substantially increase production and effectiveness.
The COVID-19 pandemic resulted in lockdowns and a halt in manufacturing activities across the world. Due to the lockdowns placed, people could not go out to buy products and necessities such as groceries and medicines. The lockdown implementation resulted in closing of the non-essential retail shops which promoted people to turn to e-commerce and shop online.
The demand for same-day and last-mile delivery increased tremendously for groceries and other essential necessities. The e-commerce platforms saw an increase in sales, for instance, in Italy the supermarket chain named Carrefour reported that their orders doubled during the lockdown. The logistics company Glovo, which was just a start-up, saw a 10-fold increase in the order for deliveries.
As the lockdowns lifted, customers started to return to the conventional way of shopping. However, the demand for e-commerce has still flourished due to the convenience customers have of ordering products sitting at home. The additional discounts serve as incentives for people to shop online, increasing the market of e-commerce logistics.
E-commerce has experienced tremendous growth in recent years, and with it, the logistics industry supporting online retail has also evolved significantly.
The rapid rise of e-commerce has presented new challenges and opportunities for logistics providers, leading to several recent developments in the e-commerce logistics sector.
Last-mile delivery, the final leg of the delivery process from the fulfillment center to the customer’s doorstep, has been a focal point of innovation. Delivery companies are experimenting with various solutions to improve efficiency and customer convenience.
This includes the use of autonomous delivery vehicles, drones, and delivery robots to expedite deliveries, reduce costs, and enhance the overall customer experience.
E-commerce customers increasingly expect faster delivery times. To meet this demand, logistics providers are offering same-day or express delivery services.
They are partnering with local courier services or using their own networks to ensure quick delivery of orders. These services often involve utilizing local warehouses or fulfillment centers strategically located near major urban areas to enable swift order processing and delivery.
The growth of e-commerce has driven the need for more warehousing and fulfillment centers. Logistics providers are investing in expanding their warehouse capacities and strategically locating them closer to major population centers.
This allows for faster order processing, efficient inventory management, and reduced transportation costs.
To cope with the high volume and diverse range of products in e-commerce, logistics providers are adopting advanced inventory management systems.
These systems utilize technologies such as barcode scanning, RFID (Radio Frequency Identification), and real-time tracking to streamline inventory management, improve order accuracy, and enhance supply chain visibility.
AI and ML technologies are being integrated into e-commerce logistics operations to optimize processes and improve efficiency.
These technologies can analyze large volumes of data, predict demand patterns, optimize routing and scheduling, and automate certain tasks. AI-powered chatbots and virtual assistants also provide customer support and track shipment status, enhancing the overall customer experience.
With increasing environmental concerns, there is a growing focus on sustainability in e-commerce logistics. Companies are implementing eco-friendly practices such as using electric vehicles for deliveries, optimizing delivery routes to reduce emissions, and adopting green packaging materials.
Logistics providers are also exploring innovative solutions like urban consolidation centers to reduce the number of individual deliveries and minimize traffic congestion.
Collaboration among logistics providers, retailers, and manufacturers is gaining traction in e-commerce logistics.
By sharing resources, facilities, and transportation networks, companies can achieve cost savings, improve efficiency, and reduce environmental impact. Collaborative logistics networks enable efficient utilization of assets and provide a seamless end-to-end supply chain experience.
In conclusion, the growth of e-commerce has driven significant developments in the logistics industry.
From last-mile delivery innovations to advanced inventory management systems and sustainable practices, logistics providers are continuously adapting to meet the evolving demands of e-commerce customers.
The logistics company Aramex recently reported the financial results for the second quarter of the year 2021 with revenue worth $427.6 million which was an increase by 21% from the revenue reported for the same term in the year 2020 with $352.2 million.
The company reported that the growth is driven by the strong recovery in the business-to-business services sector, particularly in the FMCG and healthcare companies. The company has announced a partnership with Cashfree, a payments and banking technology company based in Bengaluru, India. The partnership will work by the company integrating Cashfree’s global payouts solution.
The company CEVA Logistics has announced a new joint venture as part of the new development strategy with WAC in Karachi, Lahore and Faisalabad which will be fully branded as CEVA logistics.
The company has also announced an agreement to acquire 100% of the shares of Cargex S.A. which is an international freight forwarding and perishable goods expert based in Bogota, Colombia. The company is set to acquire full control of Cargex which will advance the global expansion strategy of the company.
The company has also opened a state-of-the-art in-house operations site at the ASM International NV’s new global manufacturing headquarters in Singapore as a key provider for specialized requirements of the semiconductor industry.
The company will provide critical logistics support such as storage management and inventory, trash removal, spare part management along with value-added services supporting manufacturing.
DHL Express has announced the opening of a new international hub at the Charles de Gaulle airport in Paris. The facility is set to strengthen the business of DHL in France with the company already investing EUR 80 million over the last six years for the French infrastructure.
The company has also announced a strategic partnership with the e-commerce platform PrestaShop. The company will strengthen its worldwide presence by engaging PrestaShop’s 300,000 participating merchants via joint promotional events and pre-installed DHL application.
The company has announced an agreement to acquire 100% of the J.F. Hillebrand Group AG and its subsidiaries at the equity value of EUR 1.5 billion. The group is the global e-commerce logistics provider and ocean freight forwarding and transportation company.
The company also announced the financial results for the second quarter of the year 2021 with revenue worth EUR 19.5 billion which was a 22.2% increase from the revenue of the same term for the year 2020 which reported revenue worth EUR 15.9 billion.
The company is launching a global brand campaign to strengthen its position as the leader of e-commerce. The company has announced a partnership with Fiat professionals to further electrify its last-mile delivery services. It plans to introduce 14,000 more electric vans to be operated in Europe by the year 2030 in order to reduce carbon emissions.
