How Digital Logistics Solutions Boosted Business Trade Competitiveness in 2024?

Key takeaways:

• Introduction
• Role of automation and robotics in digital logistics
• Contribution of IoT and AI to the growth of the industry

Trade with other nations plays a vital role in driving the economic growth of any country. The higher its trade competitiveness is, the faster the GDP growth rate of that country. Naturally, every sovereign state tries to increase its exports and reduce its dependence on imports so as to improve the volume of foreign exchange. Companies hence strive to enhance the quality of their product and offer them at cheap prices to make them more attractive to the global consumer base. Reduction in the cost of operations is one of the most common methods to reduce the price of the product, without compromising on its quality. Hence, businesses often try to bring down their logistical expenses to make their goods more competitive and increase the share of their exports.

One major point of difference between developed and developing countries is the share of logistics costs with respect to their GDP. Lower supply chain management costs make any product or service more competitive. For instance, in the case of the US and China, the logistics cost is around 8-9% of their GDPs; while, in India, this ratio goes up to 14-16%. Naturally, Indian goods are much costlier in international markets, thus reducing their demand in the long run. Hence, modernizing the logistics sector as per the global industry standards becomes quite important for the overall growth of the economy. Digital logistics offers an ideal solution to this issue, thereby enabling not just multinational companies, but also small and medium-scale enterprises to strengthen their foothold worldwide.

Automation and robotics expanding the footprint of the landscape globally

Digital logistics refers to the use of advanced digital technologies to improve every activity associated with supply chain management, including transportation, warehousing, inventory management, forecasting, and customer care services. In the last few years, the growth of the digital logistics market is attributed to the rise in the adoption of automation and robotics by different companies to improve their operational efficiency and productivity. The industry accounted for $24.8 billion in 2022 and is anticipated to amass a revenue of $155.3 billion by 2032, citing a CAGR of 20.4% during 2023-2032.

As per a recently conducted survey, more than 85% of logistics companies are now actively investing in automation technologies such as autonomous vehicles to simplify their logistical operations. Studies have shown that more than half of the logistics expenses are related to last-mile delivery of goods and services. By employing self-driving cars, companies are able to reduce their transportation costs significantly and free up labor in more productive activities. Moreover, these vehicles are also being deployed in warehouses to execute repetitive tasks such as stacking, palletizing, etc. Collaborative robots have also proven to be extremely beneficial in performing packaging, accounting, and dispatch procedures. Currently, there are around 3 million industry robots deployed across various end-use sectors worldwide. A rise in investments in R&D activities is expected to increase this number in the coming period.

Artificial intelligence and IoT solutions creating favorable conditions for the growth of the industry

Apart from automation, IoT technology has immensely contributed to the expansion of the digital logistics industry. The most obvious benefit of deploying IoT-based tools in logistical operations is real-time tracking of shipments, which helps companies in fleet management and timely delivery of goods and services. Moreover, end-use sectors such as food processing and packaging use these devices due to their ability to forecast the weather and traffic conditions during transportation of different perishable items. Nowadays, specialized IoT tags are widely utilized to monitor various parameters, including temperature, humidity, UV exposure, etc., to assist businesses in maintaining the integrity and purity of their goods and prevent untimely spoilage during delivery.

While IoT presents numerous benefits in supply chain management and digital logistics, there is a rise in concerns regarding security and privacy. The growing threat of cyber threats and malware attacks has created hurdles in the full-fledged adoption of this technology. In such a scenario, AI tools have helped companies create a robust cybersecurity structure that enables users to reduce the likelihood of fraud and unauthorized access. Many leading logistics companies have launched AI-based solutions to improve visibility and traceability in supply chains.

For instance, in August 2024, Federal Express Corporation, a multinational transport corporation, unveiled its AI-powered digital logistics solution, viz., FedEx Surround. Equipped with advanced sensors and machine learning algorithms, this system helps companies continuously monitor their shipments across the globe and take necessary steps in case of emergencies. The SenseAware ID technology used in the solution sends information regarding the delivery package to the company regularly, thus reducing the chances of disruption in shipping processes.

To conclude, the growing need for small and medium-sized enterprises to lower logistical costs and enhance product competitiveness in global markets has driven a significant rise in demand for digital logistics solutions. The emergence of automation, robotics, IoT, and AI is expected to bring numerous growth opportunities in the sector.

Get in touch with our experts for more information on the evolving dynamics of the digital logistics industry!

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