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Logistics—a bright spot in a global economy still recovering from the pandemic—presents many opportunities in Asia.
FREMONT, CA: Global logistics have seen significant change as has the majority of other industries as a result of the COVID-19 pandemic. Global logistics, however, have not been adversely impacted by the pandemic's drop in economic activity as much as most other businesses. The consumption of goods - and the ensuing logistical requirements - has largely been unaffected. With more new start-ups creating more severe competition, the market is becoming more dynamic. Legacy players are responding by taking measures to strengthen their positions through M&A activity or expand operations by going public. This is especially true for the Asian market, where all signs suggest that in the coming year, the continent's recovery will outpace that of the rest of the world. Between 2020 and 2025, the region is anticipated to contribute 57 per cent of the growth of the global e-commerce logistics market. As a result, APACmay becomes the single most important location for global commerce and logistical activity in the future. Companies might grab chances immediately and move swiftly to capture value, regardless of their position in the logistics ecosystem, with logistics operators, local experts, participants in e-commerce, or the logistics real estate market. Leaders will survive the pandemic by taking advantage of this window of opportunity to establish a long-lasting competitive edge and a reinforced market position.
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Although the pandemic initially produced abrupt and severe supply-chain disruptions, the crisis has also created opportunities for the logistics sector and its sub-services, such as cross-border e-commerce logistics. The pandemic may have permanently boosted the adoption of e-commerce. The COVID-19 retail recovery study indicates that internet penetration is now likely to continue to be six to thirteen percentage points higher than pre-COVID-19 levels. As consumer products and retail account for about half of the logistics business, this increases pressure on global logistics while also creating a sizable potential. Most other sectors have not fared as well throughout the crisis as the logistics sector has. The split between the logistics industry's leaders and laggards has been hastened by the COVID-19 epidemic. Less on the demand side than more on the supply side is the industry's major obstacle. A disproportional share of value will be reaped by businesses that are best equipped to mobilise operations and resources to service their consumers consistently and resolutely. Businesses that can outrun their rivals will do so fast, and it will become more and more difficult for the laggards to close the gap as it widens.
Companies in the logistics industry have concluded that Asia will probably be the most significant addition to their business portfolios to expand and remain competitive. Economically, Asia is expected to recover more quickly than other regions, and it will be the hub of all logistics activity in terms of both investment and growth. By 2030, Asia will provide over half of the growth in global trade. About 55 per cent of the increase in trade will come between Asia and the rest of the globe, with the remaining 25 per cent coming from intra-Asia trade growth. From 2020 to 2025, 57 per cent of the market's growth would be accounted for by the Asia e-commerce logistics market. To take advantage of these potentials, industry participants will need to restructure their networks.
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