New Entrants Up the Ante in Global Ecommerce Logistics Market

In 2015, the global ecommerce logistics market was the playground of Fedex Corp. and DHL International GmbH, who collectively held sway over 50% of the business worldwide, according to a new report from Transparency Market Research (TMR).

The other two key players in this space are XPO Logistics, Inc. and United Parcel Service, Inc., but their reach isn’t as wide as the two logistics behemoths. However companies are already upping the ante in anticipation of explosive growth of the ecommerce sector in India and China.

The global ecommerce logistics space is extremely attractive and will witness the rise of many new companies, TMR says. While large companies are investing in drones and last-mile connectivity to keep ahead, smaller firms are focusing on value-added differentiating services such as route optimization and innovative parcel tracking. These trends will make the ecommerce logistics market a space bubbling with innovation, TMR forecasts. Other companies to watch out for in ecommerce logistics are Gati Limited and Clipper Logistics Plc.

According to TMR, the global ecommerce logistics market reached a valuation of $146.14 billion in 2015 and will see a CAGR of 20.6% between 2016 and 2024.

Innovative Delivery Technologies will Attract Both Interest and Investments

The emergence of the contemporary B2C ecommerce model has forced companies to align and re-align their business models several times in the past years. Innovative delivery technologies are the key facilitator of this change. All eyes are on drone delivery, which will arguably be the biggest trend in the ecommerce logistics market in the coming years. Companies such as Amazon have already jumped into the fray with its Amazon Prime Air service that it hopes will soon use small drones to deliver packages in 30 minutes or less. Drones, droids, and parcel copters are here to stay, says TMR.

Moreover, the mushrooming of ecommerce startups in countries such as India, Brazil, Mexico, and Saudi Arabia will give the demand for e-commerce logistics a further boost. C2C ecommerce models are also projected to boost the market for e-commerce logistics.

Reverse Logistics Issues Hamper Ecommerce Logistics Providers

In a space that’s as competitive as ecommerce logistics, companies are forced to offer value-adds such as free delivery of goods and reverse logistics. Although most companies have a minimum value order for goods ordered in order for customers to avail free delivery, there are loopholes in this arrangement. The most common one is customers ordering goods to reach the stipulated minimum order for a free delivery and then returning unwanted goods. This burdens the reverse logistics chain and cause a spike in the cost incurred by ecommerce logistics companies.

Similarly, in developing countries where infrastructure challenges abound, last-mile connectivity is limiting the business of ecommerce logistics providers. These factors are expected to restrain the growth of the global ecommerce logistics market through the report’s forecast period.

Growing Emphasis on Last-mile Connectivity Gives Transportation Segment a Boost

On the basis of service type, the report segments the global e-commerce logistics market into warehousing, transportation, and others. Of these, the transportation segment stood as the largest in 2015, accounting for a dominant 51.6% of the market. This is thanks to the fact that the supply chain is pivoted on transportation. The growing emphasis on last-mile connectivity will give this segment a further boost.

The warehousing segment is further split into hubs/delivery centers, mega centers, and returns processing centers. Similarly, the transportation segment is divided into freight/rail, maritime, air/express delivery, and trucking/over road.

By operational area, the segments of the ecommerce logistics market are domestic and international. The largest revenue share is contributed by the domestic segment, TMR found. This can be attributed to the emergence of large domestic e-commerce companies such as Flipkart in India.

The report studies the ecommerce logistics market in North America, Asia Pacific (APAC), Europe, Latin America, and the Middle East and Africa. North America will continue to remain the largest regional market for ecommerce logistics through the report’s forecast period, at $48.32 billion in 2015. Asia Pacific will show much promise with a CAGR of 22.4% from 2016 through 2024.

This review is based on a TMR report, titled “Ecommerce Logistics Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2016 – 2024.”

One response to “New Entrants Up the Ante in Global Ecommerce Logistics Market

  1. As the global economy is developing, there is huge growth in e commerce can be seen which has increased the trends and challenges of supply chain. Last mile delivery is one of the major challenge in Supply chain. Thanks for sharing the above information.

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