The recent health crisis hit all sectors of the economy. Some of these are still recovering. However, it also opened several new opportunities in various industries, including logistics.
Many industries stayed afloat during the pandemic, such as restaurants and airlines. The logistics sector faced problems, too, but it bounced back faster.
The government imposed restrictions to curb the spread of the pandemic. This move resulted in an increased movement of goods and consumables.
The logistics industry enjoyed new opportunities, such as the increased demand for services. What is in store for this sector in 2022?
Keep reading to learn the latest statistics and trends.
The global logistics industry is registering a CAGR of 6.5% from 2020 to 2027. It will reach $12.9 trillion by the final year from $7.6 trillion in 2017.
The major factors driving its growth are the reverse logistics industry and e-commerce. The latter uses logistics services for the management of their supply chains.
The widespread adoption of logistics services fuels the expansion of the market. Among other benefits, it allows e-commerce businesses to focus on their operations.
The increase in trade agreements across different governments also plays a role. Enhancing global trade activities and new routes have increased the demand for logistics.
Logistics automation will also drive the shipping industry forward. Producers and consumers both value speed and quality. AI and robotics will help the sector move freight faster and better.
The reverse logistics market is also experiencing stable growth. It has a current value of $635.6 billion. Its CAGR is 5.6%, allowing it to reach $958.3 billion by 2028.
Reverse logistics involve returned items from consumer to business. The rise of e-commerce plays a primary role, as now customers have to bring back their bought items the same way they got them – via delivery.
Aside from return type, reverse logistics has other segments. The end-user type includes, but is not limited to:
- Luxury goods
By service, you can classify the market into fragments, some of which are:
- Refund management
As the e-commerce industry expands, reverse logistics will also do the same. Further innovations in this sector will boost client satisfaction.
The implemented safety protocols in 2020 forced the logistics industry to rise. Many businesses pivoted to the digitalization of their services.
Brick-and-mortar businesses closed down, and most people stayed at home. As a result, many relied on online solutions for their needs. This situation increased the demand for transportation services.
Because of staffing issues, many businesses also looked into new technologies. AI and robotics were previously slow to enter the logistics market. When the pandemic hit, these provided solutions to gaping issues.
These changes will likely continue to revolutionize the industry. In the post-pandemic, you will see how logistics will become more efficient.
The workforce in the logistics sector is also experiencing some changes. Work-from-home opportunities for some roles will likely remain after the pandemic. However, most low-level jobs still require the employee’s physical presence.
The last-mile delivery industry was at $18.7 billion in 2020. By 2027, experts predict it to balloon to $62.7 billion with a CAGR of 18.9%. It is also a primary driver of the logistics market.
Last-mile delivery involves the transportation of goods from the warehouse to the customer. It is not as polished as the other parts of the distribution system. For this reason, retailers are now focusing on it to stand out.
This sector experienced a boom during the pandemic. Meanwhile, other industries had limited development. The demand for the delivery of goods increased due to movement restrictions.
Last-mile delivery also expanded into other services to promote less contact with other people. Curb-side pickups and membership conveyance are some examples.
Same-day deliveries are also increasingly becoming common. It forced the last-mile delivery sector to expand fast to cater to the growing demands.
The pharmaceutical and food and beverage industries also focus on last-mile delivery solutions. Their goods place the utmost importance on time sensitivity.
The developments during the pandemic are likely to carry over the following years. The demand for deliveries isn’t slowing down even after the government has lifted some or all restrictions.
Supply Chain Jobs
The supply chain accounts for 37% of all jobs in the United States. The industry employs around 44 million people with above-average wages.
Given that the industry is increasing its reach each day, we can expect more employment opportunities. The Bureau of Labor Statistics predicts a growth of 30% over the next ten years, faster than the average of the other occupations.
With higher-than-average pay and job growth, expect a marked increase in demand. Some roles have a low barrier to entry, meaning that you don’t always need a bachelor’s or master’s degree to enter the industry.
Leading Freight Transportation Modes
Trucking remains to be the leading mode of transport. It accounts for 39.6% of freight moved in 2019.
Trucks are the best option for time-sensitive deliveries. However, they’re limited to medium and short hauls, including last-mile deliveries.
Heavy types of freight, such as lumber, coal, and ore, are likely to move by rail. The same goes for goods that have to travel over long distances.
Around 27.9% of freight use rail transport. It’s efficient and cost-effective, benefiting both the consumer and producer.
The least used mode of transport is air, accounting for 0.1% of freight movement. International shipping usually uses water or air. The rest move through the pipeline.
Freight logistics can also include multiple modes. It usually involves a combination of rail and truck, but others are also common.
Learn More About the Logistics Industry
The logistics industry is experiencing exponential growth in all its segments. Shipping freight locally and internationally is becoming more efficient thanks to continuous innovations.
The end winner is the consumer since they can get their goods faster and cheaper.
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