{"id":772,"date":"2021-03-16T11:48:58","date_gmt":"2021-03-16T11:48:58","guid":{"rendered":"https:\/\/phoenixglobalgroup.com\/mi-katigoriopoiimeno\/e-commerce-led-recovery-could-drive-contract-logistics-sector-to-new-heights\/"},"modified":"2024-02-27T09:52:12","modified_gmt":"2024-02-27T09:52:12","slug":"e-commerce-led-recovery-could-drive-contract-logistics-sector-to-new-heights","status":"publish","type":"post","link":"https:\/\/phoenixglobalgroup.com\/el\/nea\/e-commerce-led-recovery-could-drive-contract-logistics-sector-to-new-heights\/","title":{"rendered":"E-commerce-led recovery could drive contract logistics sector to new heights"},"content":{"rendered":"
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By\u00a0Gavin van Marle<\/a>
\n16\/03\/2021Contract logistics is on the verge of a period of sustained growth, due to the paradigm shift in consumer buying that has seen e-commerce sales explode over the past year.
\nThe catalyst was clearly the pandemic and subsequent social lockdowns \u2013 according to a new\u00a0report<\/a>\u00a0from McKinsey, e-commerce volumes rose 160% between 2014 and 2019.McKinsey argues that the surge in e-commerce activity \u201chas driven up demand for omnichannel distribution, which depends on a single inventory-management system to fulfill orders from both traditional stores and e-commerce\u201d. The value of omnichannel distribution is predicted to grow from 2019\u2019s $600bn to $840bn by 2025.<\/p>\n

\u201cThe shift is likely permanent,\u201d says McKinsey. \u201cOur Covid-19 retail-recovery survey finds that online penetration is expected to stay six to 13 percentage points above pre-Covid levels.\u201d<\/p>\n

Meanwhile, a new\u00a0whitepaper<\/a>\u00a0from Transport Intelligence found that, while the global contract logistics market shrank by 3.3% last year, the e-commerce-led recovery means the sector is likely to see growth of 6.5% this year \u2013 and with a forecast CAGR of 5.1% until 2025, within four years the sector could be some 25% larger.<\/p>\n

In 2019, global contract logistics pulled in revenue of $226.6bn, Ti forecasts this to grow to $280.8bn in 2025.<\/p>\n

\u201cThe consequences of the Covid-19 shock to the global economy are difficult to predict, due to its unprecedented nature,\u201d it says.\u00a0\u201cHowever, it has hit labour-intensive sectors the most, such as retail, and has reduced sales of intermediate goods to affected sectors.<\/p>\n

\u201cPost-pandemic, the drivers of recovery will be different to those which powered economic expansion before 2020. Capital and other resources need to be allocated to productive sectors which power job creation.<\/p>\n

\u201cThe rate of this economic transformation will be important in shaping the prospects for the contract logistics market,\u201d the report says.<\/p>\n

A further fillip for logistics operators, according to McKinsey, is that the added complexity of e-commerce supply chains means logistics firm can charge up to 50% more than for traditional retail logistics \u2013 although they have to contend with increased costs.<\/p>\n

\u201cAs a result of smaller average order sizes, e-commerce fulfilments typically require more touchpoints than do traditional retail logistics.\u00a0The packing process also often requires extra steps, such as gift wrapping or promotional inserts.<\/p>\n

\u201cThe storage capacity required tends to increase to accommodate a long tail of products typical for e-commerce, and e-commerce goods are frequently stocked in decentralised locations to allow for faster last-mile delivery.<\/p>\n

\u201cThis drives up complexity, labour, and inventory costs, and many contract-logistics companies have found it difficult to move toward more agile and diffused operations in a cost-effective way while still catering to their traditional brick-and-mortar customers,\u201d McKinsey noted.<\/p>\n

It advised LSPs targeting the contract logistics sector to focus their investment plans on warehouse automation, IT integration and data analytics; develop multi-customer networks, integrate with last-mile delivery partners and develop \u201cflexible contract structures that allow customers to adjust their storage capacity\u201d.<\/p>\n

Source:
\nE-commerce-led recovery could drive contract logistics sector to new heights – The Loadstar<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Gavin van Marle 16\/03\/2021Contract logistics is on the verge of a period of sustained growth, due [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[29],"class_list":["post-772","post","type-post","status-publish","format-standard","hentry","category-nea","tag-2021-el"],"yoast_head":"\nE-commerce-led recovery could drive contract logistics sector to new heights - PHOENIX GLOBAL FREIGHT GROUP S.A. - Since 1991<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/phoenixglobalgroup.com\/el\/nea\/e-commerce-led-recovery-could-drive-contract-logistics-sector-to-new-heights\/\" \/>\n<meta property=\"og:locale\" content=\"el_GR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"E-commerce-led recovery could drive contract logistics sector to new heights - 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