Kati Suominen , Nextrade Group and Alliance for eTrade Development
Logistics challenges – last-mile delivery, cross-border shipments, and warehousing costs and customs procedures – are among the most challenging constraints to micro, small, and midsize enterprises (MSMEs) in ecommerce. The global supply chain woes have only intensified these challenges.
At the same time, solving for the logistics challenges is lucrative, giving rise to great many logistics technology solutions and companies (here called “logtechs”) around the world, including on developing economies, to enable MSMEs that sell goods online to move their products and cargo efficiently. Among some of these solutions are digital addresses, last-mile delivery solutions, technology-driven warehouse systems, digitized freight exchanges for trucking and ocean cargo, digital freight forwarders, and cargo consolidation systems, and real-time end-to-end tracking of shipments, among others.
The boom in ecommerce amid COVID-19 is rapidly expanding the demand for ecommerce logistics globally and solve especially smaller businesses’ logistics pain points – for example to manage the rapid growth in the volume and diversity of stock keeping units; respond to consumers’ demand for fast home delivery; and coordinate and handle delivery end-to-end and lower shipping costs.
Among the solutions responding to this demand include a range of last-mile delivery models and micro fulfillment centers that facilitate the distribution and delivery of goods in busy urban areas; cargo consolidation systems that enable MSMEs to pool shipments with each other and lower logistics costs; digitized freight exchanges that match logistics demand to supply; and digital freight forwarders that streamline the logistics of shipments traveling by trucks and sea
The purpose of this report is to map out logtechs enabling MSME ecommerce in different regions of the world and propose models for development partners to help scale logtechs and their services to MSMEs that are selling and buying online. In particular, this report will:
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Summarize the various logistics costs and challenges MSMEs face in engaging in ecommerce, and that also cities and countries re facing as ecommerce shipments proliferate;
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Present new data on the rise of logtechs and new logistics business models in different world regions;
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Assess the density and diversity of logtech ecosystems around the world and the drivers of logtechs’ proliferation and growth;
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Present case studies on different logtech providers in developing regions, as well as emerging models form developed economies;
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Discuss how city and national governments have worked with logtechs to promote urban traffic flow and reach remote markets.
The author's views do not necessarily reflect the views of the United States Agency for International Development or the United States Government or any of the eTrade Alliance members.