A drone designed for delivery services is displayed during a logistics expo in Shanghai. (Photo/Xinhua)
Digital technologies will find wider use in the global logistics industry over the next five years and get a further fillip due to regional trade integration and cross-border ecommerce, a new survey-based industry report said on Tuesday.
The report, which was published as part of events of the 2021 Global Logistics Summit in Shanghai, said widespread digitalization in the global logistics sector was only a matter of time. Nearly 76.93 percent of the survey respondents anticipate widespread digitalization to happen in the next five years, while 25.69 percent expect the same in two years.
Online bookings would account for more than 60 percent of all logistics bookings across the industry in the next three to five years, according to 73.08 percent of the respondents, while 13.05 percent expect the figure to exceed 80 percent, it said. The report was jointly published by the Shanghai International Shipping Institute, the China Transport Telecommunications& Information Center, the China International Freight Forwarders Association and YQNLink, a global intelligent logistics platform based in Shanghai.
The report was compiled over a six-month period and included research and surveys conducted among nearly 1,000 firms in the international logistics sector. It attempts to illustrate the industry status quo, international logistics trends, as well as the opportunities and challenges faced by the industry, said experts.
The logistics sector is currently at a turning point of digitalization and intellectualization due to the rapid development of the industry, with the COVID-19 epidemic acting as a catalyst, said Xu Guoyi, office director of the Shanghai Combined Port Management Committee.
Since the second half of last year, the contagion has affected the international logistics sector badly in the form of higher freight costs and capacity shortages. Shipping costs from China spiraled up and hit a 12-year high by the end of December, according to data provided by the Shanghai International Shipping Institute.
Although freight rates have edged down a bit after the Chinese Lunar New Year, the unexpected Suez Canal blockage in March caused a new round of capacity shortages and higher freight costs, experts said.
The COVID-19 outbreak and the Suez Canal incident have indicated there is an urgent need to strengthen existing supply chains, while wider adoption of digital technologies would help upgrade shipping services, said Xu Kai, chief information officer of the Shanghai International Shipping Institute.
Earlier, customers used to make their logistics decisions based on the duration and cost. Since the COVID-19 outbreak, the focus has shifted to reliability, said Xu.
Small freight forwarders with low risk control capabilities are particularly facing cost and business pressures. They are among those eager to find alternative solutions through digitalization, business transformation and collaboration, said the report.
Enterprises engaged in international logistics, be it third-party platforms, shipping companies, freight forwarders, or port operators, are all tapping digital applications in multiple dimensions, so as to strengthen the stability and reliability of logistics services, it said.
"It is worth mentioning that digitalization of international logistics operations does not just mean shifting the offline business to online. Instead, it involves the reconstruction of the entire logistics process with digital technology," said Xu Guoyi.
Meanwhile, YQNLink, a Shanghai-based logistics platform, said on Tuesday that it has obtained fresh funding of $100 million in its latest financing round. It was the largest single financing deal a Chinese company reached in the global logistics digitalization sector and enabled the Chinese company to attain a valuation of $1 billion after the completion of the investment.
"Digital technology is one of the most effective tools in dealing with the uncertainty of global logistics business. We would like to play an active role in promoting the industry upgrade and intelligent development," said Zhou Shihao, founder and CEO of YQNLink.
Experts anticipate huge growth opportunities for the sector amid rapid digitalization of the logistics sector.
