Bill Gates and Jeff Bezos Say Logistics Technology Is Biggest Potential
Reading Time: 2 minutes Bitcoin may be the most in-demand form of investment with at least $66 billion total market cap nowadays but it’s far less in comparison to the freight industry. According to Digital Commerce 360, global logistics basically runs the world’s economy by creating jobs and even energizing international economies.
Various eCommerce giants are seeing its growth potential each year. Alibaba is now planning to move into logistics over the next 5 to 8 years. Jeff Bezos, the owner of Amazon, has also upped its logistics game, formally registering the company as an international freight forwarder. Now, Bill Gates is also up for the challenge by venturing into logistics technology with Logtech.
Logtech venture capital investments have seen some rapid growth for the past few years. According to CB reports in 2016, at least $5 billion was invested in logistics technology.
Though all 315 deals went to various divisions of logistics technology, e-commerce logistics, freight and supply chain visibility, and last mile delivery.
“In the freight and supply chain area, we are seeing companies connecting importers directly with freight companies. Like the trucking marketplace startups, they are democratizing shipping by creating an open, competitive marketplace. Technology helps to optimize logistics costs and support better decision making by providing access to, and transparency for, key logistics cost drivers.” Zvi Schreiber, CEO and founder, Freightos
Merging eCommerce with Technology
Large eCommerce companies see the importance of logistics to their marketplace operation. According to Digital Commerce 360, 50% of consumers admit that delivery factors such as delays, or delivery cost affect their decisions when making a purchase.
That’s why two-day, same day and two-hour delivery gradually became a norm in online shopping. For tech companies, relying on a logistics sector plays a vital role in their business.
Changes in urbanized areas, population growth, and the aging infrastructure has affected the “business as usual” model, and large international markets are now looking for more efficient and sustainable business models. This will require both retail and tech sectors to partake in innovating their services to its full potential.
What do you feel about Jeff, Jack and Bill’s attempt to venture into logistics? Share your ideas down below.
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Dave Furness
Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.
Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.
As automation and AI move to disrupt other industries – like ride sharing services – the same will happen in logistics. Unfortunately, it is a case of what came first the chicken or the egg? FreightCenter customers (both shippers and shoppers) demand predictability, accessibility, transparency and affordability now, and many asset based logistics companies are not in the same rush to supply that level of technology. Third-party logistics providers, like FreightCenter, or ecommerce giants, like Alibaba and Amazon, are rushing to fill that gap in technology.
Absolutely agree, and those at the forefront of the technology will be the biggest winners, as we have seen throughout eCommerce.
Great article. I think Startups will continue to play a key role here as well. As logistics demands and complexity increases, the major players will of course lead the way, but let’s not forget that they have grown over decades and often through acquisition – which results in many parts that aren’t well integrated and technology that lacks the advantages of modern solutions. Enter the Startup, which can help find innovative ways to solve the outlier and troublesome issues that would take the large players years (and lots of $$ to fix).