The global exponential rise of online commerce accelerates a trend that is transforming the corporate world in all sectors: digital transformation. Businesses in every industry are already adopting digital technologies and altering their business practices to reflect new digital transformation trends. To meet changing consumer and market expectations, they develop new processes, tweak current ones, establish new business cultures, and even launch new customer experiences. Logistics and transportation organizations can benefit from digital transformation by making use of new technology and being competitive in an ever-expanding market.
The global digital transformation spending in logistics market is projected to reach US$ 94,972.3 million by 2026, expanding at a CAGR of 10.7% during the forecast period (2018 to 2026).
Logistics firms invest in digital transformation to improve logistic services’ optimization, efficiency, speed, and timeliness, resulting in increased customer satisfaction and income. Among a variety of technological evolutions and in a progressively digital environment where digital transformations are impacting the industry, the majority of CEOs of transportation and logistics companies perceive digital solutions as significant areas of investment. Numerous businesses are looking for new solutions capable of capitalizing on the promise of digital technologies.
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COVID-19 is emerging as the most important catalyst of digital transformation. Over 60% of organizations in Europe, North America, and Asia Pacific anticipate a faster rate of change in the digital transformation between 2020 and 2023. All sectors are currently experiencing a digital revolution. Automation expenditures are increasing as organizations across all industries, including logistics, go online and establish digital projects. Despite the COVID-19 problem, the global digital transformation spending in logistics market witnessed significant growth and is expected to grow further in the near future.
Moreover, the surge in demand for digitization of business operations and increased cost pressure on service providers are expected to fuel worldwide digital transformation spending in the logistics market. The logistics business has been slower to accept digital innovations than other industries, which might prove devastating even for the industry’s large companies. However, the future market demand for digital transformation spending in logistics is projected to skyrocket. Furthermore, digitization is occurring across sectors, and the advantages for businesses are transformative, with increased customer awareness and reach, enhanced productivity, and novel business models.
Incorporation of AI and ML in Logistics to Aid Market Growth
The incorporation of AI and ML in logistics is projected to create revenue-generation opportunities in digital transformation spending in logistics market. The possibilities for AI and ML in logistics are enormous. A supply chain can be a great source of structured and unstructured data. Logistics companies can significantly transform operations by utilizing and evaluating them, identifying patterns, and producing insight into every link of the availability chain.
ML can assist businesses in uncovering patterns in supply chain data by utilizing algorithms that determine the most important aspects driving the profitability of their supply network while learning continually and concurrently. These patterns can be related to inventory levels, forecasting demand, supplier quality, transportation management, production planning, and other topics. They provide businesses with the knowledge and insights that help them improve supplier performance, reduce freight costs, and decrease supplier risk.
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North America to Dominate Digital Transformation Spending in Logistics Market
North America is likely to make significant contributions to the global digital transformation spending in logistics market during the forecast period. The United States is expected to be the largest revenue generator in digital transformation spending in logistics market in North America. Digital transformation needs active and adaptable IT assistance, which is offered in the vast majority of the region’s businesses. Due to the increased use of logistics solutions, North America dominates the worldwide digital transformation spending in logistics market.