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Global logistics spending to hit $10.6 trillion with last mile a significant cost

Global logistics spending is set to top $10.6 trillion in 2020 according to Urban Logistics Opportunities—Last-Mile Innovation, a new report from Frost & Sullivan.

It found that of that transportation will account for the majority of spend at 70%. About two-fifths of the overall logistics costs are associated with the last mile. Frost & Sullivan predicts the market will rapidly move toward mobile freight brokerage-type, on-demand deliveries and autonomous technology, such as the use of drones and delivery bots which are set to solve the last mile delivery challenge by being more cost-effective to end users with lesser regulatory mandates.

Emerging technologies such as cloud computing, big data, and crowdsourcing, coupled with an influx of tech-savvy start-ups, are already beginning to transform delivery models.

“Spiralling last-mile delivery costs and changing customer demands are causing retailers to rethink their strategies and look toward new business models such as click-and-collect, locker boxes, on-demand, and autonomous solutions,” said Vijay Narayanan Natarajan, visionary innovation senior research analyst at Frost & Sullivan. “Moreover, the influx of start-ups in logistics has enabled innovative solutions that not only provide value-creation customized solutions for the consumer, but also tackle the inefficiencies currently witnessed.”

“Rapid proliferation of connected technologies and solutions, and further advancements in autonomous applications could well usher in new innovations in logistics with delivery bots and drone solutions all set to be the future of urban deliveries,” said Archana Devi Vidyasekar, visionary innovation global research manager.

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