$4.6 Trillion Logistics Industry Facing Dramatic Realignment

The global transportation & logistics (T&L) industry is facing dramatic realignment in an era of unprecedented change as new digital technologies, changing customer expectation and collaborative operating models reshape the marketplace.

That’s according to a new PwC report, Shifting Patterns – The Future of The Logistics Industry, which says that the prize for modernizing even segments of the industry can be huge.

The report points to digital, data analytics and platform technology as facilitating new entrants, new business models and new ‘sharing’ opportunities.

PwC research suggests that, while 90% of T&L companies see data and analytics as the key drivers in redefining the sector over the next five years, 50% acknowledge that the absence of a digital culture in their own organization is the single biggest challenges they face.

Yet, despite its seeming shortcomings, the industry is proving a magnet for investors. Since 2011, around $160m - $150m of which is private equity (PE) - has been invested in digital logistics alone.

Andrew Tipping from Strategy& (part of the PwC network) says that this alone suggests that investors see scope for new entrants disrupting established players and for strong returns from a $4.6 trillion market: “The global logistics sector is something of an enigma. Technology is changing every aspect of how T&L companies operate and digital fitness will be a prerequisite for success.

“The winners in this race for transformation will be those who best understand and exploit a range of new technologies from data analytics to automation and platform solutions – those who don’t will be the losers and risk obsolescence.

“This race is for the brave and the digitally fit and investors and the market will reward the winners.”

 

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