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Change in the logistics industry after the adoption of large-scale technology

The global economy has been affected by multiple geopolitical concerns, including the impacts of COVID-19 and supply chain disruptions resulting from various ongoing conflicts. All sectors, including logistics, have been hit hard by the economic imbalance.

In response, sectors are focusing on deploying technology to improve efficiency, build resilience and ensure sustainability. A major shift in approach is the widespread use of technology for digitizing logistics operations to minimize costs and reduce errors rather than maximizing throughput.

COVID-19 has accelerated the adoption of technology in the logistics industry. While the advancements and adoption of technology in the logistics industry continued, the industry had a conservative approach to innovation. This was highlighted during the pandemic-induced disruptions when organizations began to deploy digital solutions such as data analytics for long-term forecasting as well as logistics planning for route optimization, l use of abilities, etc.

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E-commerce has been a major driver of technology in the logistics space. While the pandemic has served as a catalyst for the culture of “home delivery” in the B2C environment, the natural progression towards the B2-B environment is expected to impact the logistics operations of many organizations.

The shift from traditional electronic data interchange to application program interfaces with cloud integration has enabled logistics companies to connect to e-commerce marketplace platforms. It enables logistics providers to obtain real-time information such as location data as well as use automated billing solutions for logistics cost simulation.

For example, Project44, a real-time logistics visualization company, helped a leading 3PL company save over $4 million by minimizing quote-to-invoice discrepancies and automating the documentation process.

Technology trends such as AI, big data, IoT, automation and robotics are seen as essential tools for digital transformation across the industry, with some examples of use cases:

• Using AI for predictive logistics with a focus on capacity planning, network optimization and last mile delivery optimization. For example, GE has developed an AI/ML tool, which uses digital twin technology to simulate the logistics process; he claims that it would reduce the cost of logistics by 10%.

• Deployment of AI and automation/robotics in freight (self-driving trucks), as well as smart warehousing (e.g. machine vision, automated guided vehicles), form the foundation of a supply chain fully automated.

• Big data and analytics are used for real-time tracking and tracing integrated with logistics visualization solutions, among others.
Based on the ongoing developments, blockchain has been a strategic focus for the industry, especially when considering data and identity security aspects related to logistics data. This is evident from industry-wide pilot projects run by logistics companies.

Some examples are noted below:

• Maersk and IBM’s TradeLens ecosystem enables real-time freight tracking and automation in shipping logistics documentation. Since its inception in 2018, the TradeLens ecosystem now has over 1,000 companies and has tracked over 55 million containers.

• Kuehne + Nagel’s (2018) blockchain-based logistics portal is used for logistics data storage and exchange, supply chain management, and digital bills of lading.

• CargoX, a startup using blockchain technology for ocean freight, issues digital bills of lading, reducing the cost of documentation by 85% compared to traditional document courier service.
Sector investments provide perspective on technological developments.

According to a World Economic Forum report titled The Digital Transformation of Logistics: Threat and Opportunity, the total opportunity for digital transformation in the logistics industry is over $4 trillion (2025). The forum divides the industry’s digital transformation into five key categories.

Investments in last mile delivery solutions, as well as information solutions and logistics services platforms, have been the areas of investor focus in recent years, with total sector funding for 2021 alone falling. amounting to more than 20 billion dollars.

While the investments highlight the logistics industry’s improved sentiment towards technology, another key trend worth noting is the consolidation of technology providers to deliver an end-to-end customer experience, e.g. , acquisitions made by Project44 in 2021.

These acquisitions include ClearMetal, an AI/ML-based solutions provider; Ocean Insights, a provider of ocean freight information; Convey, a last mile solutions provider; and Synfioo (acquired in 2022), a European rail freight information and visibility provider.

Rising investments, a growing ecosystem of technology providers and a push by organizations to improve logistics operations are driving large-scale technological transformation in the industry, while platform solutions based on a SaaS business model are expected to play a critical role in widespread adoption.