Logistics digital transformation spending to reach $75.5 billion globally by 2026
COVID-19 has been a huge driver of digital transformation, pushing CAGR up to 8.8% over the next five years in global markets
COVID-19 has emerged as the biggest driver of digital transformation says a report from Global Industry Analysts Inc., In their research, more than 60% of companies in North America, Europe and Asia expecting expect to witness a higher velocity of change in digital transformation during the years 2020 through 2023 across all areas measured.
The global market for digital transformation in logistics, which had an estimated value of $45.6 billion in 2020, is projected to reach a revised size of US $75.5 Billion by 2026, growing at a Compound Annual Growth Rate (CAGR) of 8.8% over the period.
Within the different areas analysed in the report, hardware is projected to grow at an 8.2% CAGR to reach $38.3 billion, and software will grow at an even higher 8.9% CAGR for the next seven-year period.
Digital transformation spending in logistics in the US is estimated at $14 Billion in the year 2021. The country currently accounts for a 29% share in the global market.
China, the world second largest economy, is forecast to reach an estimated market size of $13.7 Billion in the year 2026 trailing a CAGR of 10% over the analysis period.
Japan and Canada were also noteworthy, each forecast to grow at 7.7% and 8.5% respectively over the next five years. In Europe, Germany is forecast to grow at approximately 7.8% CAGR.
The push towards digital transformation in these markets in pushing up investments in connected devices, Radio Frequency Identification (RFID) and Internet of Things (IoT) for enhanced real-time visibility into the supply chain. The future holds more opportunities for transportation & logistics companies to improve their efficiency and profits said the analysts. IoT and vehicle-to-vehicle communication holds promise for enabling "vehicle trains".
In the global services segment, USA, Canada, Japan, China and Europe will drive the 9.9% CAGR estimated for this segment. These regional markets accounting for a combined market size of US $8.1 Billion in the year 2020 will reach a projected size of US $15.7 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets.