June 6, 2016

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Evolution in Global E-Commerce Logistics

Despite the slowdown in world trade this spring, the e-commerce logistics market is expected to grow at 9.69 percent through 2020, maintain analyst’s information was given by a leading market research company with global coverage.

Researchers say cross-border online shopping is particularly strong in emerging markets.

These countries have recorded an increase in foreign goods consumption and are driving the demand for e-commerce logistics. During the forecast period, China is expected to emerge as the largest market for online shopping, as their growing middle-class population is increasingly spending on foreign products. The logistics market in China is predicted to exhibit significant growth and contribute to the overall revenue of the global e-commerce logistics market.

Last-mile deliveries for e-commerce

Two types of warehouses are required for e-commerce logistics, small facilities for last-mile deliveries, and larger requirements serving regional e-fulfillment. Last-mile delivery facilities are located in proximity to city centers. Originally, logistics service providers were focusing on developing regional centers, but with the growing demand for same day deliveries, last-mile delivery centers are also gaining traction.

To provide to the repeatedly changing logistical requirements of the e-commerce industry, vendors are expanding their existing networks or acquiring new ones.

In September 2015, Menlo Logistics partnered with real estate developer Prologis to build a distribution facility in the Netherlands. Their warehousing, distribution and fulfillment center will provide direct access to markets in neighboring countries such as Belgium and Germany.

Increasing technology investment

One of the foremost trends set to develop in the e-commerce logistics market is an increase in investments in technology to help logistics service providers augment their delivery services and monitor the movement of goods accurately given the short lead times. The use of software technologies such as warehouse management software, automated material handling equipment, warehouse control software, and other evolving technologies, such as mobile technology, global positioning systems, trailer seals, RFID, and biometrics, is expected to help logistics providers maintain a balance in inventory levels and monitor products correctly.

For instance, in 2014, Deutsche Post DHL signed a five-year contract with their service provider Escher Group for using software, which will allow DHL to streamline its network by introducing easier collection and delivery of parcels in Germany. To expand further expansion, DHL has also invested in a next-generation procurement platform, which provides the Deutsche Post DHL group an e-procurement platform that integrates five key areas of strategic sourcing: savings management, spend analysis, supplier relationship management, and sourcing and contract management.

E Commerce is a growing trend in the logistics industry and all 3PLs are now focusing on development of their capability in this area.