Digital Freight Forwarding Market 2023-2030 by Vertical (Retail and E Commerce, Manufacturing, Healthcare, Automotive, and Others), Mode of Transport (Land, Sea, and Air), Function (Warehouse Management and Transportation Management), and Deployment Mode (Cloud and On Premises) - Partner & Customer Ecosystem (Product Services, Proposition & Key Features) Competitive Index & Regional Footprints by MarketDigits
Industry : Information Technology | Pages : 187 Pages | Published On : Jul 2023
The Global Digital Freight Forwarding Market, valued at $2.92 billion in 2022, is projected to reach $22.92 billion by 2030, with a compound annual growth rate (CAGR) of 23.1%.
The outbreak of the COVID-19 pandemic had a severe impact on various businesses, leading governments worldwide to impose strict lockdowns and enforce social distancing measures to contain the virus spread. As a result, the supply chain was disrupted, and logistics activities came to a halt globally. Transportation and logistics operations between countries were temporarily suspended, significantly affecting the supply of goods and causing disruptions in the supply chain. However, as social distancing measures eased, the digital freight market experienced a substantial recovery in 2023. This recovery was fueled by the exponential growth of e-commerce, retail, and pharmaceutical sales, as well as revitalization initiatives in the automotive industry. With global trade rebounding due to widespread vaccination efforts, the demand for digital freight forwarding services, which offer cost-effective and fast delivery solutions, is expected to grow significantly.
Digital freight forwarders leverage digital tools to facilitate smooth communication and provide real-time updates on shipment statuses. They employ transparent systems that compare various shippers to offer the best deals to customers. By generating, uploading, and sharing documents on web platforms, digital freight forwarders reduce paperwork and provide easy access to all stakeholders.
The growth of the global digital freight forwarding market is primarily driven by the expansion of the e-commerce industry and the increase in free trade agreements. However, challenges such as poor infrastructure, high logistics costs, and stringent regulations for air freight pose hindrances to market growth. On the other hand, the adoption of direct-to-consumer (DTC) e-commerce logistics and the implementation of multi-modal systems for cost cutting and lead time reduction are expected to create new opportunities for market growth during the forecast period.
The global digital freight forwarding market is categorized into different segments, including mode of transport, function, vertical, deployment mode, and region. In terms of mode of transport, it is divided into land, sea, and air. The market is further classified based on function into warehouse management and transportation management. Vertical segmentation includes retail and e-commerce, manufacturing, healthcare, automotive, and others. Deployment mode consists of cloud and on-premises options. Geographically, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Key players operating in the global digital freight forwarding market include Descartes Kontainers, Deutsche Post DHL Group, Flexport, Inc., Forto GmbH, iContainers, Kuehne+Nagel International AG, Transporteca, Turvo Inc., Twill, and Uber Freight LLC.
The expansion of the e-commerce industry on a global scale has been a significant driver for the market. E-commerce provides a virtual platform for the sale of goods and services, eliminating the need for physical retail spaces. Logistics services play a crucial role in managing the supply chain for e-commerce companies, enabling them to focus on marketing and other business operations. The convenience, accessibility, and attractive discounts offered by e-commerce platforms have contributed to their popularity and the overall growth of the market. According to the United Nations Conference on Trade and Development (UNCTAD), online retail sales as a share of total retail sales increased by 3% points from 2019 to 2022, reaching 19% globally. Countries such as South Korea, China, and the UK witnessed even higher shares of online sales at 25.9%, 24.9%, and 23.3%, respectively.
Currently, international trade has become a complex process involving multiple individuals and organizations. Supply chains now extend across different countries and regions, and trade operates round the clock. Achieving high performance in logistics requires not only improved connectivity through various transportation modes but also encompasses information processing, financial markets, and telecommunications. As a result, there is a growing adoption of digital freight forwarding services, driven by the benefits they offer to e-commerce companies, such as efficient tracking systems, cost-effective shipments, and faster quoting processes. These advancements are expected to drive the growth of the global digital freight forwarding market in the forecast period.
The rise in free trade agreements is another factor contributing to the market's growth. The logistics industry is experiencing significant expansion due to dynamic market conditions and improvements in the global economy. With rapid globalization, trade-related activities are increasing substantially, making it challenging for manufacturers or retailers to effectively manage their supply chains. This factor is anticipated to fuel the demand for digital freight forwarding services. Free trade agreements play a crucial role in facilitating trade between parties, leading to increased import-export activities and supporting the overall development of the logistics ecosystem. Benefits such as tariff reduction or elimination, intellectual property protection, and fair treatment of investors are important advantages offered by free trade agreements. The United States currently has 14 free trade agreements with 20 countries in force.
In Asia, China, Singapore, and India have 47, 44, and 43 FTAs respectively, creating lucrative opportunities for the logistics industry and contributing to the economies of these nations. Additionally, the UK and India are expected to sign an Early Harvest Agreement by March 2022, enabling selective benefits in commodities and services between the two nations. This decision was made after a meeting between the Indian and British Commerce and Industry on September 13, 2023. All these factors are projected to boost import-export activities and drive the growth of the digital freight forwarding market in the forecast period.
Poor infrastructure and higher logistics costs
Sophisticated infrastructure, well-organized supply chains, and trade facilitation policies are essential components of an efficient logistics ecosystem. Without these elements, logistics firms are compelled to invest more in stock reserves and working capital, which significantly impacts national and regional competitiveness due to the associated high financial costs. Furthermore, the lack of infrastructure development in various countries poses obstacles to logistics operations, leading to increased costs and reduced reliability in the supply chain.
Several factors contribute to the inefficiencies and challenges faced by logistics companies. These include shortcomings in transport management systems, inadequate storage infrastructure, complex tax structures, limited adoption of technology in the logistics sector, and low proficiency of logistics professionals in utilizing digitalization tools. For instance, in Latin America, infrastructure deficiencies are evident, with over 60% of the region's roads remaining unpaved, as reported by the Economist. Moreover, inconsistent address and postal systems pose challenges for parcel delivery teams in Latin American countries. The absence of postal codes and reliance on local landmarks for addresses often result in difficulties in successful parcel delivery by shipping companies. Additionally, logistics costs are heavily influenced by infrastructure availability and quality. Infrastructure directly affects transportation costs and indirectly impacts inventory levels, thus incurring financial costs.
Consequently, due to inadequate transport infrastructure, companies need to maintain higher inventory levels to account for potential contingencies, leading to increased overall logistics costs. Thus, poor infrastructure, coupled with elevated inventory expenses and limited warehousing space, is expected to act as a significant hindrance to the growth of the global digital freight forwarding market.
Rise in adoption of DTC e-commerce logistics
Digital freight forwarding plays a crucial role in the emerging field of direct-to-consumer (DTC) e-commerce logistics. The increasing demand for both domestic and international goods drives the growth of e-commerce logistics. DTC e-commerce enables companies to connect directly with customers, eliminating the need for intermediaries. The primary objective of digital freight forwarding is to ensure fast and efficient delivery of goods to their final destinations, while enhancing the overall customer experience. By automating various activities, freight forwarding digitization contributes to the modernization of supply chains.
DTC e-commerce streamlines shipping and other services through various means. Domestic freight forwarders facilitate effective communication throughout the process. On-demand tracking enables real-time monitoring of shipments, providing shippers with visibility into the progress. Real-time data monitoring allows access to information at every stage of transportation, helping to identify and rectify errors that might otherwise go unnoticed. These advantages associated with DTC e-commerce are expected to drive the growth of the global digital freight forwarding market in the forecast period.
COVID-19 Impact Analysis
The impact of the COVID-19 pandemic on the digital freight forwarding market has been unpredictable, and its effects are expected to persist until the second quarter of 2023. The outbreak of COVID-19 led to the implementation of strict lockdown measures by governments, resulting in flight cancellations and restrictions on e-commerce services. This, in turn, caused a significant decline in logistics activities worldwide. The pandemic's adverse impacts created substantial supply and demand issues, leading to extensive delays in digital freight forwarding operations globally.
By Mode of Transport
• Warehouse Management
• Transportation Management
• Retail and E Commerce
By Deployment Mode
• On Premises
Key Benefits For Stakeholders
• This analysis provides a comprehensive overview of the global digital freight forwarding market, highlighting the latest trends and future projections to identify promising investment opportunities.
• By examining profitable trends, this study aims to help stakeholders establish a stronger position in the digital freight forwarding market.
• The report includes valuable insights into the key drivers, restraints, and opportunities shaping the global digital freight forwarding market, supported by a detailed impact analysis.
• To assess the financial competitiveness, a quantitative analysis of the current digital freight forwarding market is conducted from 2022 to 2030.
• Additionally, Porter's five forces analysis is employed to evaluate the bargaining power of buyers and suppliers within the industry.
Table and Figures
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