Digital Transformation Spending in Logistics Market Projection of Each Major Segment over the Forecast Period 2018 – 2026

Digital Transformation Spending in Logistics Market – Snapshot

The global digital transformation spending in logistics market is projected to be driven by rise in demand for digitalization of business processes and increase in cost pressure on the service providers. The logistics industry has adopted digital advances at a slower pace than other industries, which could be potentially disastrous even for the major players in the industry. Hence, digitalization of business processes drives the digital transformation spending in logistics market. Additionally, digitalization is happening across industries, and the benefits are revolutionary for companies with greater consumer awareness and reach, higher productivity, and innovative business models. However, the end-users have to make significant initial investments and incur high maintenance costs. These act as restraints of the market. The global digital transformation spending in logistics market is anticipated to reach US$ 94,972.3 Million by 2026 at a CAGR of 10.7% during the forecast period.

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Logistics companies spend on digital transformation to increase efficiency, optimization, and speed and timing of logistic services, thereby increasing customer satisfaction and revenue. Among a range of rapid technological evolutions and in an increasingly digital environment where digital transformations are affecting the industry, most of the CEOs of transport & logistics companies appreciate digital solutions (to engage with customers, and optimize production and operations) as major areas of investment.


Growth in e-commerce coupled with quick delivery of goods to gain competitive advantage has led to high demand for transport management systems and warehouse management systems. Moreover, increase in the number of Internet users along with rise in popularity of social media platforms has contributed to the surge in awareness about digital solutions. Innovative digital solutions and sharing platforms are being incorporated within the enterprise infrastructure. Vinculum Solutions, an India-based company, focuses on delivering solutions (Vin eRetail WMS) and products specific to the retail industry. The solution supports easy order delivery, last mile delivery, and integration of manufacturers, logistics companies and web stores among each other.

The online sales channel has become more complex and has induced manufacturing businesses to adopt digital transformation. Moreover, as an alternative to in-house fulfillment, a large number of retailers have shifted from Internet order processing to 3PLs, which are equipped and experienced in warehouse management system to handle these online needs. This is expected to propel the Warehouse Management System (WMS) market in the next few years.

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Several strategies and approaches have been established to increase the efficiency of logistics over the years. Collaboration is considered to be one of the most promising factor in these strategies. These startups as well as leading players are prepared to collaborate with each other and complement their offerings. Sharing of these platforms encourages collaborative working, allowing the key players to retain their dominance. The deal becomes a win-win for the two companies as the new player gets easy access to the market which might not be welcoming and the market leaders increase their efficiency and develop new business models, such as shared networks.

Digitalization of business processes is a key trend boosting market growth. Obsolete systems and labor-intensive processes create more challenges and complexities, slow down operations, and hinder the ability of the industries to grow revenue. These manual tasks can result in significant inefficiencies and productivity losses for the businesses. Hence, the logistics industry strives to form a complete digital, flexible, and connected supply chain optimized for e-commerce and last-mile, last-minute delivery. Technological advancements have led to increased adoption of digital transformation across the transportation and logistics industry.

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The global digital transformation spending in logistics market has been segmented based on solutions, deployment, services, industry and region. In terms of solutions, the market has been classified into hardware solutions, software solutions, and services. The hardware solutions segment has been categorized into systems, devices, and IT equipment. The software solutions segment has been divided into IoT platform, warehouse management & control system, transport management system & enterprise solutions. The services segment has been classified into consulting, integration, and operation & maintenance. Based on industry, the global digital transformation spending in logistics market has been bifurcated into third-party logistics (3PL) and warehouses.

In terms of region, North America is projected to lead the global digital transformation spending in logistics market during the forecast period. Digital transformation requires active and flexible IT support, which is available in the majority of the companies in the region. North America dominates the global digital transformation spending in logistics market primarily due to increase in adoption of logistics solutions. The digital transformation spending in logistics market in Asia Pacific is anticipated to grow at a rapid pace due to increasing digitization and rising use of Internet. Furthermore, the market in Europe, the Middle East & Africa, and South America is expected to witness strong growth during the forecast period.

The global digital transformation spending in logistics market is largely driven by merger & acquisition and partnerships. For instance, in October 2017, IBM acquired Sydney-based Vivant Digital, a small boutique digital consultancy. This acquisition addressed the growing needs of clients seeking transformation though innovative digital business models and enhanced customer experiences. Key players profiled in the report include Hexaware Technologies, IBM Corporation, JDA Software WMS, Logitech Corporation, XPO Logistics, Mindtree Ltd., Oracle Corporation, Samsung Electronics, SAP SE, Sanco Software LLC, Syntel, Inc., and Tech Mahindra Limited.

Digital Transformation Spending in Logistics Market: Snapshot

Several companies from diverse industrial sectors are increasing acceptance of digitalization owing to its wide range of advantages. The technology is helping enterprises to achieve higher productivity, greater consumer awareness and reach, and modern business models. While major businesses today are growing focus toward incorporating advanced technologies, the worldwide logistics industry seems to adopt the digital advances at a sluggish pace as compared to the other industries. In recent few years, major companies engaged in the logistics sector are growing interest in digitalization of their business processes. This scenario has pushed the demand for digital transformation spending in the logistics sector.

The companies in the logistics industry are increasing their spending toward digital transformation. This activity is helping them achieve increased optimization, efficiency, and timing and speed of logistic services. As a result, these enterprises are experiencing growth in their revenue as well as increased customer satisfaction. With the onset of rapid technological advancements, many CEOs of transport and logistics companies are increasing adoption of digital solutions. This move is helping organizations optimize their production and operations as well as ability to engage with their customers. On the back of all these advantages, the players working in the digital transformation spending in logistics market are expected to gather promising sales avenues in the forthcoming years.

However, the need for spending large amount money as initial investment can work as a restraint for the growth of the digital transformation spending in logistics market. Apart from this, the high maintenance costs of digitalization many impede logistics companies from the adoption of digital transformation spending.

Major players in the global digital transformation spending in logistics market are increasing investments in research and development activities. This tactic is assisting them in providing technology driven products. Apart from this, the industry is experiencing increasing number of collaboration and partnership activities. On the back of all these actions, the digital transformation spending in logistics market is foreseen to gain promising growth avenues in the years ahead.

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