The magnitude of the global logistics industry

Published on Author Zach Ware2 Comments

I obsess over the magnitude of the global logistics industry. In the startup world we focus so often on consumer-facing companies because they make sexy stories…they’re relatable.

As technologies and efficiencies have improved, the demand to move smaller parcels has moved further up the distribution chain.

The old supply chain needed to move mass quantities of goods from manufacturer to importer to distributor to retailer and then to the consumer.

Today’s technology allows companies to skip steps, moving less quantity per shipment and sometimes shipping directly from the manufacturer to the consumer. For some incumbents, this is a catastrophic shift.

These changes are all made possible by innovations in efficient production requiring shorter lead times and lower minimum production quantities, more efficient planning technologies, innovations in retail (like Amazon and Ice.com) and other such innovations.

These changes are gargantuan. We talk about Uber’s impact on taxi companies frequently. We don’t talk frequently about signals like the number trucking companies declaring bankruptcy (which doubled in the first quarter of 2016).

To get a sense for the size of the market take a look at the below graphic. As a comparison, global revenue from taxi operations, a topic we love to talk about, is a mere $22B. UPS’s annual revenue alone tops $58B. Maersk, one of the largest sea-cargo companies, generates revenues of $47B.

The shift is catching entire industries off-guard. The opportunity for innovators is significant.

Source

global-logistics-market-infographic.jpg

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This post originally appeared at Zach Ware's Notebook.

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