Cross-border Logistics and Fulfillment Services: $8 trillion plus laggard on the cusp of significant productivity jump

Logistics and fulfillment services are significant cost centers in the global economy. Shipping, inventories, etc., cost roughly $7tn or 10% of world GDP, while for-hire trucking in the US and the EU alone each represent $0.5tn of the total addressable markets (TAM), which asset-light brokers control roughly a third.

Transport industries require significant capital (ships, planes, infrastructure), while also being labor-intensive (1 in 16 jobs in the US are trucking related). Also, both asset utilization and workflow automation are relatively low. For example, trucking or shipping fleets are typically about 30% empty, with relatively limited load factor improvements over the past decade.

Cost saving potential from digitization appears significant and comes from multiple sources. For example, automating data input functions in freight forwarding could potentially save up billions of dollars wasted in manual processes; higher supply chain visibility could help cut the annual carrying cost of US business inventories. ‘Data analytics’ could help improve container ship utilization. And ‘Uber for trucks’ applications promise to increase trucking load factors significantly.