Read Arma’s view on how the evolution of the digital economy during Covid-19, coupled with the boost provided to e-commerce, is driving the adoption of tech solutions across supply chains in full on Forbes here.
The pandemic has prompted businesses to increase their digital investments and accelerated the proliferation of technology throughout the global economy. This has been particularly advantageous for software providers and digital-native e-commerce platforms.
Sitting at the intersection of these categories, software providers that bolster global supply chains and distribution networks have experienced a particular boom this year.
Sitting at the intersection of these categories, software providers that bolster global supply chains and distribution networks have experienced a particular boom this year. To name a few examples, Wisetech Global’s share price has risen by 110% since April 2020, Descartes Logistics Solutions’ by 114% and Manhattan Associates’ by 226%. This has propelled M&A activity as retail and institutional financial investors are keen to play a part in the thriving sector, whilst strategic buyers want to bolster their position within the lucrative market. The subsequent deal boom falls into three categories within logistics software: supply chains, e-commerce and digital freight-forwarding.
National lockdowns throughout the pandemic negatively impacted domestic, regional and global supply chains. Companies were forced to adapt to unprecedented circumstances, which boosted the adoption of technological solutions.
National lockdowns throughout the pandemic negatively impacted domestic, regional and global supply chains. Companies were forced to adapt to unprecedented circumstances, which boosted the adoption of technological solutions. For example, Panasonic acquired Blue Yonder for $5.6bn in order to make global supply chain decisions faster and provide clients with the ability to adapt their operations in real-time.
The freight forwarding industry has also experienced profound changes.
Similarly, in e-commerce the pandemic has changed consumer expectations of flexibility and delivery speed when buying products online, as well as driving further strategic acquisitions. For example, FedEx purchased e-commerce platform ShopRunner, which allows customers to buy from over 100 brands, as well as offering a two-day delivery.
The freight forwarding industry has also experienced profound changes. It has benefitted from increased fundraising as earlier-stage growth investors jump at the opportunity to invest in tech companies that digitize their processes. The growing demand for digital freight forwarding functions has also contributed to the ‘Uberization’ of the market, a process whereby customers can, for example, search for road freight carriers digitally.
The pandemic has heightened companies’ focus on supply chains, fueled investment by e-commerce platforms and quickened the digital transformation of the freight forwarding industry. In the post-Covid world, these developments will shape logistics as an especially active part of software.