On-demand logistics solutions are being increasingly used by e-commerce companies, owing to the changing shopping pattern of customers and increasing consumer preference for fast shipping and competitive pricing. As traditional logistics alternatives are unable to meet the rising expectations of customers, e-commerce firms are deploying on-demand logistics services to manage inconsistent shipping needs and meet the sudden need for bulk supply. Thus, the flourishing e-commerce sector will create a huge requirement for on-demand logistics services in the forthcoming years.
Moreover, the mounting investments being made in the logistics industry, especially in the upcoming start-ups offering logistics services and services, will help the on-demand logistics market to accelerate at 21.1% CAGR during the forecast period (2020â€“2030). The market revenue stood at $9.1 billion in 2019 and it is projected to reach $75.0 billion by 2030. For instance, in July 2018, GoGoVan, a Hong Kong-based company, announced that it had raised $250 million in the initial phase of its new round of funding.
In recent years, companies such as Lalamove EasyVan (Thailand) Co. Ltd., Shadowfax Technologies Pvt. Ltd., Stuart Delivery Ltd. (STUART), Shippify Inc., MENA 360 DWC-LLC (Fetchr), Bringg Delivery Technologies Ltd., Deliv Inc., Deliveree (Thailand) Co. Ltd., Uber Freight LLC, and GoGo Tech Ltd. (GoGoVan), have started to focus on geographical expansions and partnerships to meet the burgeoning need for cost-effective and convenient on-demand logistics services from various end-use industries. These companies deploy light commercial vehicles and medium/heavy commercial vehicles (M/HCVs) in their fleets to meet the logistics need of the industrial and e-commerce sectors.
The end use segment of the on-demand logistics market is divided into business to business (B2B) and business to customer (B2C). Of these, the B2B category held the larger market share in 2019, due to the increasing adoption of app-based delivery services by enterprises to facilitate their delivery activities and magnify their profit margins. Whereas, the B2C category will demonstrate the faster growth throughout the forecast period, due to the easy accessibility of on-demand logistics services through mobile apps. Such apps ensure the safe delivery of goods as the users can track their products in real-time through them.
According to P&S Intelligence, North America has emerged as the largest user of on-demand logistics solutions in the recent past. This was due to the extensive use of trucking services, majorly in the U.S., owing to the massive profit generated by the transportation and logistics industry in North America. Moreover, the increasing shortage of drivers and freight solutions will also create a huge requirement for more effective solutions such as on-demand logistics in the coming years.
Whereas, the Asia-Pacific (APAC) on-demand logistics market is expected to exhibit the fastest growth throughout the forecast period, due to the existence of a vast consumer base in countries such as India and China, owing to their vast population. Moreover, the flourishing e-commerce sector and mounting disposable income of people in the region will also contribute to the market growth in the upcoming years. Besides, the rising technological advancements and escalating consumer awareness about the use of convenient logistics options will also drive the regional market growth in the foreseeable future.
Therefore, the booming e-commerce industry and surging investments being made in the logistics industry will amplify the need for on-demand logistics solutions in the foreseeable future.