Inside Logistics

E-commerce driving logistics industry growth

Urbanization and increasing disposable income of consumers have a direct impact on the retail sector


September 12, 2018
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The global logistics market is expected to register a compound annual growth rate (CAGR) of over seven percent during the period 2018-2022, according to the latest market research report by Technavio.

A key factor driving the market is the rapid growth in the e-commerce retail market. Urbanization and increasing disposable income of consumers have a direct impact on the retail sector that is experiencing an expansion of well-organized retail spaces.

This is especially true for e-commerce, which is expanding at a rapid pace in most regions due to the increasing penetration of the Internet and mobile devices. Key factors leading to the operational success of this sector are efficient inventory management and quick delivery. The growing demand for e-commerce has led to an increased need for improved efficiency in delivery systems, inventory management, and freight forwarding.

Technavio predicts the rise of 5PLs as an emerging major factor that has the potential to significantly impact the market and contribute to its growth or decline. In 2017, most of the global logistics market was managed by third-party providers, followed by 4PLs.

However, the growing complexities in supply chain management are driving the rise of the 5PL. 5PL solution providers organize, construct, and implement the best possible supply networks and technologies on behalf of or in close consultation with contracting parties.