Reshaping the business by adopting digital technology is digital transformation. With it, businesses could create new or modify its existing processes, culture and even customer experiences to satisfy changing business needs and market demands. Digital transformation, especially in transportation and logistics industry, help a company to stay competitive in a market that is continuously growing with the evolution of technology.
The global market size for digital transformation in transportation and logistics was valued at USD 54.92 billion in 2018 and is anticipated to rise up to USD 145.28 billion by 2025 with a CAGR of 13.0% during the forecast period. Clearly, there is high adoption of digital technologies in field of transportation and logistics as developing robust new platforms solve problems related to asset underutilization, reduces supply chain inefficiencies, improve demand-supply matching, and increase connectivity and visibility across systems. With the improved operational connectivity and visibility between previously siloed systems, stakeholders are able to seamlessly connect to each other throughout the supply chain.
However, limited IT capacity can hinder the market growth. As half of logistics executives expressed the lack of required technology skills and expertise throughout the supply chain. This is a bothering situation to more than half of companies and as a befitting measure, companies rely on external partners. Other strong barrier is resistance to change. One fourth of total transportation companies don’t own an appropriate digital strategy and generally rely on conventional technology and legacy software to manage workflows and communicate with partners. There is lack of collaboration between business development teams and technology.
With challenges, comes opportunities for digital transformation in transportation and logistics. As digital transformation requires updated IT system in any firm to embark on the digital journey. Firms are required to allocate investment in such a manner that it enhances both the present business and develop new business. Furthermore, the widest scope lies in availability of “Real-time data”. With help of real-time data, everything is visible in and out which eradicates the pressure of limited information.
On geographical front, North America dominated the global digital transformation in transportation and logistics market and had value of USD 18.67 Billion in 2018 and is expected to grow during the forecast period 2019 – 2025. However, Asia-Pacific is anticipated to have fastest growth rate in the forthcoming years. International companies are growing into this region and able to reap gain from the digital transformation. In the New-Asia, China lies at the centre and used to be low-based manufacturing which is now shifting to Cambodia, Laos, Vietnam and frontier markets like Bangladesh and Myanmar.
The key digital transformation vendors for transportation and logistics sectors are Amazon Amazon, APL Logistics Ltd., IBM Corporation, Walmart, Logitech Corporation, Samsung Electronics and others.
Segment Overview of Global Digital Transformation Market in Transportation and Logistics
Regional Overview, 2015-2025 (USD Billion)
- North America
- Rest of Europe
- Asia Pacific
- Southeast Asia
- Rest of APAC
- South America
- Rest of South America
- Middle East and Africa