Digital Logistics Market Size & Share, by Technology (Internet of Things (IoT), Artificial Intelligence (AI); Service Type; End use; Deployment Model - Global Supply & Demand Analysis, Growth Forecasts, Statistical Report 2025-2037

Digital Logistics Sector: Growth Drivers and Challenges

Growth Drivers

• Surge in e-commerce driving digital logistics adoption: The digital logistics market is impacted by the exponential growth of e-commerce across the world, fueled by post-pandemic ease of restrictions, which shifted consumer behavior, leading to heightened purchases through e-commerce. The U.S. Census Bureau reported that e-commerce sales in the U.S. reached USD 284.4 billion in the second quarter of 2024, highlighting a more than 7% expansion from the previous quarter.
  The growth of e-commerce sales globally requires logistics to ensure there is no disruption in operations. In that regard, companies such as Amazon have remained at the forefront of investments in logistics supported by AI to cut down delivery times. Additionally, an analysis of the market trends highlights that the logistics providers that are proactive in leveraging digital technologies assist in improving supply chain visibility.
• Adoption of autonomous freight technologies: The market is favorably impacted by the integration of autonomous vehicles into freight transport. The trend has ensured that constraints plaguing logistics, such as labor shortages, are fixed. Moreover, companies such as Volvo and DHL Supply Chain are at the forefront of initiating driverless trucks in the U.S. by leveraging advanced sensors to ensure 360-degree obstacle detection. To ensure sustained growth and benefit from the expansion of the digital logistics sector, firms should continue investments in autonomous vehicle technologies to further mitigate labor challenges.
• Rapid integration of IoT for real-time tracking and monitoring: IoT has emerged as a major technological advancement, facilitating improvements in the logistics markets worldwide. For instance, in June 2024, the Chhattisgarh Medical Services Corporation Ltd. announced the successful implementation of a GPS-based tracking system to facilitate a smooth delivery of medicines across the state in India. The successful use cases highlight a reduction in operational risks, as well as improvements in supply chain transparency, both of which are significant requirements in achieving ESG goals.

Cybersecurity Initiatives in the Digital Logistics Market

The digital logistics market is increasingly vulnerable to cyberattacks. A major factor threatening the sector is its hyper-connective nature, as creating an established digital logistics operation requires IoT solutions. Additionally, the growing complexity of cyberattacks has created the necessity to invest in improved security solutions. For instance, between 2023 and 2023, targeted attacks rose, with the ransomware attack on Marks & Spencer standing out. In that case, perpetrators exploited social engineering tactics and infiltrated the systems, leading to whopping financial losses worth over USD 40.5 million. Similarly, in Australia, Barnett's Couriers had to cease their operations after suffering from debilitating cyberattacks. The table below highlights notable attacks impacting the market between 2023 and 2024.

Challenges:

• Inadequate infrastructure and addressing systems in developing regions: In numerous developing countries, the lack of a well-established infrastructure, such as addressing systems and high-quality roadways for logistics, can impair the expansion of the digital logistics sector. For instance, UNCTAD’s assessments have highlighted that in nations such as Nepal and Samoa, urban areas make up the bulk of e-commerce activities due to limitations in transport infrastructure. Despite the challenge, the growth of infrastructure in emerging economies, such as India, is expected to negate the challenge by opening the avenues for new regional markets.

• Fragmentation in information flow: A key feature of digital logistics is its reliance on information exchange across various stakeholders. Concerning the reliance, SBIR.gov has noted that logistical information and processes are dispersed, causing limitations in sharing between groups. Additionally, the lack of standardized data formats has exacerbated the constraint, causing widespread inefficiencies.