In the years from 2014 to 2018, there has been a 24.4% annual growth in total investments for the e-commerce startups in the transportation and logistics industry. Last year, the sector witnessed a 15.7% increase in the overall funding received by e-commerce transportation and logistics startups, helping some of these startups gain the limelight for their innovative delivery processes and technologies.
The aspect of transportation and logistics is an indispensable pillar of the e-commerce ecosystem especially in the ones that involve tangible goods. Cost and efficiency management of the e-commerce industry revolves mainly around how well the transport and logistics industry manages the same factors.
The extensive logistics network is critical for ensuring smooth delivery of the goods in the e-commerce industry for order fulfillment. The whole process of storing the products, preparing them to be dispatched, and shipping them is referred to as order fulfillment. The transportation and logistics sector is a leg of this process which several companies choose to complete with their in-house logistics and transportation facilities. With the increase in the new technologies that are offering superior transport features, an increasing number of these transportation and logistics brands are turning to third parties for fulfilling the last leg of order fulfillment.
This ever-growing sector also comprises of companies that are focused on people’s transit. These transit services are being offered through web-based platforms and app. Some of these companies take care of solutions for the active transportation of both people and goods. The recent years have seen an increase in startups that are offering transportation services through e-commerce.
Here are some of the top companies in the E-commerce and Transportation & Logistics sector that are making headlines. These companies include all kinds of startups that are helping shape the global transportation and logistics industry one way or another.
Next Future Transportation
Next Future Transportation is a new age network of an advanced smart transportation system. The company’s self-driving vehicles are proving to be a disruptor in the transportation and logistics company. These pods have been designed to be viable for the transit of both goods and people. When joined together, these modules form a bus-like structure. Founded by Emmanuele Spera and Tommaso Gecchlin in 2015, the company is a future-ready transportation and logistics player that counts the likes of Careem and Roads & Transport Authority (a body of the government of Dubai).
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Silicon Valley based Kodiak Robotics is among the top companies that were funded in the last five years up to 2018. It was founded by Don Burnette and Paz Eshel last year and among the youngest and most exciting startups and is an intermediate between the transportation and logistics and software sector. Kodiak Robotics understands the need for efficient trucking systems and technology in the industry. The company is pioneering as a leader in creating viable and efficient self-driving truck technology that could prove to be a disruptive option in the long-haul trucking segment. An efficient long-haul trucking system would automatically translate to better opportunities for the e-commerce industry as well.
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NewEase China is among the fastest growing transportation and logistics company in the Asia Pacific region. It has already accumulated funds worth $800 million within just a year of existence. NewEase China is helping make the Chinese transportation and logistics network more efficient with its dynamic services and connections. The company specializes in the areas of intelligent logistic operations, integration of the logistics and business platforms, opening up of freight routes with the help of integrated transport and logistics resources, mobilizing the tools for better investments for development of the logistics infrastructure.
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Uber inspired Indian startup Ola is among the top companies that have created an online market place for cab services creating a successful platform that converges e-commerce and transportation and logistics. Ola was born in the IT startup hub of India, Bangalore, and has become a widely used app for finding hassle-free transportation pan India. The company was co-founded by Ankit Bhatia and Bhavish Aggarwal. The startup is less than ten years old and is among the several Indian startups to have crossed the billion dollar mark.
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New York based Gett is an international on-demand transportation and delivery company. It was co-founded by Dave Waiser and Roi Moore in 2010 and is a leading mobility service e-commerce company. Backed up Volkswagen and many other prominent investors, Gett offers its services in more than 120 cities across the world. It has a growing customer list of more than 2000 companies and achieved the unicorn status last year when its valuation jumped to $1.4 billion. Gett has grown to acquire three companies and total investments of $693 million within less than a decade of its existence.
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Top Countries with a Soaring Transportation and Logistics Segment
The global ecommerce industry has seen impressive growth in recent years. While 2015 saw the highest number of deals, 2017 was the year that recorded the highest investments amounting to $25 billion. This growth can be attributed to the regional e-commerce industries around the world and various other factors including technological readiness, increased internet penetration, and better transportation and logistics industry. Let us look at some of the top countries that have created the best opportunities for their respective transportation and logistics industries for fantastic growth.
Germany for E-commerce Startups in Transportation & Logistics Sector
Germany was ranked as number one in the logistics sector by the World Bank in one of its rankings for 2018. The rankings were based on factors like logistics competence, tracking and tracing, international shipments, and infrastructure among the others. The country is home to one of the most diverse and innovative logistics industry that has grown immensely owing to a number of factors. Easy access to expertise in the domain and financial resources are two of the important ones. According to a research report by the Deutsche Bank, the annual turnover for the transportation segment was EUR 290 million. Although the performance of the sector in 2015 was not exceptional, the industry steadily grew in the years following that. The transportation and logistics industry has helped in creating a sustainable jobs market as well.
United States of America for E-commerce Startups in Transportation & Logistics Sector
According to a report by HexGn, USA has also set itself apart for the tremendous opportunities it offers the transportation and logistics industry to thrive. With factors like better employment rates and increased consumer spending has helped the sector stay on top in this country better than the others. In the years from 2014 to 2018, the year that did not look great was 2016; however, the following year the transportation and logistics industry picked up showing a YOY growth rate of 6.2% in the total business logistics costs, according to a report by ATKearney. The transportation and logistics segment in the country was valued at $1,171 billion in 2017.
India for E-commerce Startups in Transportation & Logistics Sector
The transportation and logistics sector has shown a remarkable growth from 2014 to 2018 and is expected to grow even more in the coming years. It is expected to touch $215 billion by 2021 and display a CAGR of 10%. E-commerce along with other factors like the increased manufacturing capacity and FMCG sectors are propelling this growth for the sector. However, the segment still needs to become a more streamlined and organized in order to keep up with the excellent performance year after year. Warehousing is expected to become a top area that will show a promising growth within the logistics industry in India. Warehousing is not as prominent in the industry and shows a lot of potential for growth in the coming years.
While transportation and logistics are a strong pillar of the e-commerce industry and are converging to become stronger, the lack of development may pose as a challenge too in several regions. Other factors that can hamper the growth also include shipping to countries with stringent import rules and the lack of technology to fuel the spark of e-commerce in specific regions.
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