Thursday, 9 February 2017

Logistics – The Backbone of E-commerce!

The transportation of essential goods is of prime importance in any business. It ensures the continuation of the production cycle in a manufacturing setup. It has been used in the military to deploy goods at the right time to ensure victory. Transportation plays a vital role in e-commerce for the timely delivery of goods to consumers. This process which involves the movement of goods for commercial purposes is known as logistics.

Global Logistics Market

Latest in Logistics

E-commerce is a booming sector that helps consumers access an array of products  that are only a mouse click away. Since e-commerce caters to millions of consumers, it requires excellent warehousing facilities. Logistics plays a pivotal role in the success of these e-commerce companies that need to frequently transport goods from point of origin to the destination. Alibaba, a Chinese e-retailing company in 2016 acquired Lazada, a Singapore based e-commerce company. This could help the former acquire a substantial market share in Southeast Asia.

Fourth-party logistics (4PL) organizations are independent entities established as either long term contracts or as joint ventures between one or multiple partners and a primary client. They act as mediators between clients and logistic service providers (third-party logistics). These organizations effectively manage logistical operations and all aspects of the supply chain of clients. 4PL organizations are ideal for online retail chains.

Location is Key!

Cities are densely populated areas with shopping districts catering to major consumer needs. Suburbs are located in outskirts of cities and require a well developed logistical framework for the smooth functioning of businesses.

Businesses need to choose the best locations that reap optimum returns and thus ensure viability in the long run. Even though most cities these days are rather congested with limited parking and one-way streets, they offer the comfort of quick transportation.

Transportation in suburbs is somewhat difficult because of underdeveloped infrastructure and long roads. However, as per the Brooklings Institute, nearly 75% of the global population may reside in cities by 2050. Logistic companies need to establish effective strategies & branches to ensure the continuous flow of goods & services.

Market Overview

The global logistics market may exhibit a CAGR over 8% from 2015 to 2019, according to a report on Radiant Insights, Inc. It is driven by the international trade flow between countries.

The road freight transport segment generated highest revenues in the overall market in 2015. This can be ascribed to improved roads in Asia Pacific (APAC) and North America. North America and APAC display high market potential in relation to third-party logistics (3PL) solutions.

Syngenta, an agribusiness company recently collaborated with Accenture Strategy, a solutions provider in all sectors, to implement a 4PL model to monitor its routes via network towers. Key industry players are Accenture Strategy, Amazon Logistics, United Parcel Service, Inc. (UPS), and DB Schenker among others. 

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