Blog Description

How Connected Logistics is Reshaping Retail, Manufacturing, and Beyond

Connected Logistics Market

Infrastructure | Jan, 2024

In today's fast-paced world, the logistics industry is undergoing major changes in their operations. With the advancement of technology, many logistics companies are adopting innovative techniques to optimize the supply chain. One of such latest trends is connected logistics. The term "Connected Logistics" refers to the concept of utilizing emerging technologies to build supply chains that are data-rich, fully transparent, and highly coordinated. Connected logistics is the integration of digital technology with the entire supply chain, creating a seamless, end-to-end network. This digital transformation is revolutionizing the logistics industry and creating opportunities for businesses to streamline their operations, reduce costs, and drive customer satisfaction. From manufacturing to retail, connected logistics is reshaping the way businesses operate and interact with their stakeholders.

Connected Logistics technology stands for a system of interconnected devices rendered by IoT solution providers to increase the operating competency in the logistics industry. Connected logistics technologies focus on regulation in monitoring, fleet management, asset management, and tracking warehouse management. This technology also consists of other associated logistics operations, such as order processing, financial transactions, dispatching, and shipping. Connected logistics establishes communication among all the involved parties and the enhanced level of information generation and real-time updates helps in preventing delayed deliveries.

According to TechSci Research “Connected Logistics Market – Global Vertical Size, Share, Trends, Opportunity, and Forecast Segmented By Component (Hardware, Software, Services), By Transportation Mode (Roadways, Railways, Airways, Waterways), By Vertical (Manufacturing, Automotive, Food and Beverages, Consumer Goods and Retail, Oil & Gas, Travel and Hospitality, Healthcare and Pharmaceuticals, and Others), By Region, By Competition 2018-2028,” the Global Connected Logistics Market was valued at USD16.28 billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 14.48% through 2028.

The market growth is driven by various factors, such as adoption of third-party logistics (3PL), and rapid changes in recent years. A 3PL provider manages all aspects of fulfilment, from warehousing to shipping. Connected logistics is a partner or service provider which assists e-commerce merchants to outsource activities related to distribution and logistics. At present, third-party logistics is commercially available in varying transportation modes and service types, including domestic and international transportation management. Giant e-commerce companies like Amazon have huge in-house teams which act as their third-party logistics.

The market also faces certain challenges like globalization and geopolitical factors. Geopolitical factors like trade disputes, tariffs, and political instability can impact the smooth flow of goods and lead to uncertainty in the supply chain. 3PL providers must stay informed about these factors and frame strategies to mitigate their impact.

Around 90% of Fortune 500 companies use a 3PL.

Connected Logistics and Retail Industry

Connected logistics is transforming the retail industry by facilitating end-to-end tracking of products, which is enabling faster delivery times. The retail industry has always been at the forefront of adopting new technologies, and connected logistics is no exception. Connected logistics systems ensure that the products are tracked from the warehouse to the store shelf and ultimately to the customer, providing complete transparency in the supply chain.

One of the key benefits of connected logistics is its ability to optimize warehousing and distribution networks. By integrating sensors and real-time tracking technologies, businesses can gain greater visibility into every aspect of their supply chain operations, from the movement of raw materials to the shipping of finished products. This technology can help businesses reduce inefficiencies, improve inventory management, and optimize delivery routes and schedules.

For example, retail giant Walmart has implemented a connected logistics system that uses IT-enabled automation to route vehicles, optimize scheduling, and optimize fuel usage. By doing so, the company has not only been able to reduce delivery lead times but also reduce fuel usage, which in turn has had a positive impact on the environment.