The logistics market represents about 12% of the world’s GDP. In 2018, the global logistics market was valued at $9.6 trillion, and it is expected to continue to grow exponentially.
Robust supply chain management and logistics ensure safe and timely delivery of goods globally, providing incredible value to businesses and individuals. Here we share five little-known facts about supply chain logistics to help you know one of the world’s fastest-growing industries a little better.
Origin of the word logistics
Many people believe logistics is a relatively new term. However, its origin dates back to the 19th century. It has been derived from the French word ‘Logistique,’ which means ‘to lodge.’ Nowadays, logistics entails managing the cargo until it reaches the final destination or the end consumer. It includes all the activities involved in between: acquiring, storing, or transporting the goods.
It employs over 5 million people
As per the Bureau of Labor Statistics, transportation and warehousing employ over 5 million people in the US alone. It gives work to even more people in certain other countries. For instance, India’s logistic industry employs over 22 million people, increasing by 7% every year.
Types of logistics
Depending on the distribution method and complexity, logistics can be divided into the following five types:
A. First-party logistics (1PL)
B. Second-party logistics (2PL)
C. Third-party logistics (3PL)
D. Fourth-party logistics (4PL)
E. Fifth-party logistics (5PL)
Out of these, 3PL is the most popular because it makes the supply chain more efficient and reduces costs significantly. It is why 90% of Fortune 500 companies used at least one 3PL in 2017, and the number is increasing every year.
RFID is behind efficient shipment tracking
Radio-frequency identification (RFID) tags have made tracking goods more straightforward and manageable. With a 95% accuracy rate, they have significantly reduced the time it takes to manage inventory, increasing shipping efficiency.
Same-day shipping is the new normal
Three-to-five day delivery window for the order to arrive has become a thing of the past. Consumers across the globe now want same-day deliveries. According to a 2018 report, 65% of retailers were expected to provide same-day delivery services in 2019.
This recent shift in consumer behavior has put a lot of pressure on supply chains and has made 3PL logistics so popular. Air shipping has also considerably increased, as it is the fastest means of transportation. The time is not far when drones would make deliveries to your home.
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