One of the most anticipated moments of the year for the logistics industry is the presentation of the annual study of the Contract Logistics “Gino Marchet” Observatory of the Polytechnic University of Milan. The conference presenting the results of the 2024 Research was held last November 12, and we at GEL certainly could not miss it.
“Logistics at the Center of the Demand Transition,” the theme of the 2024 edition, reflects the radical transformation taking place in the industry, in which logistics becomes (finally, let us say) a strategic player in effectively responding to the demands-increasingly demanding-of consumers, who seek speed, sustainability and personalization.
Some thoughts emerged from the data presented on the impacts that this demand revolution has on the eCommerce world, and especially on companies selling online. In this article we therefore present the main data that emerged from the Contract Logistics Observatory’s 2024 research, the impacts for the world of logistics and eCommerce, and finally what companies can concretely do to keep up with the times.
What is Contract Logistics and the link to eCommerce
Contract Logistics refers to the outsourced management of complex logistics activities, such as transportation, storage and distribution, by specialized suppliers.
This model enables companies, including eCommerce, to optimize operational processes, reduce costs and management time, and consequently improve service for their customers.
For the eCommerce sector, Contract Logistics therefore plays an essential role: managing high volumes of orders with fast delivery times and flexible modes in fact requires specific skills and advanced technological infrastructure that online stores often do not have. This is why it is important, sometimes essential, to outsource certain operations.
The 2024 study by Politecnico di Milano’s “Gino Marchet” Contract Logistics Observatory explores these dynamics, highlighting opportunities and trends for improving delivery efficiency and sustainability.
Key findings from the Contract Logistics Observatory’s 2024 Research
After the strong expansion recorded in 2021-2022, the contract logistics sector in Italy has begun to show signs of slowing down.
Preliminary sales for 2023 stood at 115.8 billion euros, with an estimate for 2024 of 117.8 billion euros, marking a modest increase of 0.7 percent real (+1.7 percent nominal). This subdued growth reflects general economic and industrial trends, but the sector retains strategic centrality. This is confirmed by a number of structural trends, such as the increase in direct employees in leading companies (+15% in real terms) and continued consolidation activity through M&A deals, which reached 36 deals between 2023 and 2024, with a total value of about €1 billion.
Despite this, there is a decline in the overall number of companies in the supply chain: between 2019 and 2022, they fell by 35,000, affecting small businesses in particular.
On the cost side, there is stabilization in energy prices after the 2022 peak, but significant increases persist in labor costs (+4.3%), rents (+6%), and money (+19.6%). Labor costs are affected by factors such as second-level bargaining (18%), low productivity (18%), and problems with turnover (15%) and absenteeism (16%).
Outsourcing remains stable at 45.5 percent of firms in the sector, with the main benefits identified in operational flexibility (44 percent) and changing cost and service structures (34 percent).
Finally, 65 percent of contracting companies consider logistics a central function, with specific requests to suppliers ranging from improving service levels (42 percent) to containing costs (41 percent) and reducing environmental impact (17 percent).
The challenges for the logistics industry
“Logistics has great challenges ahead,” emphasized Marco Melacini, Scientific Manager of the Observatory. But exactly what challenges are they? We can summarize them as follows.
Sustainability: the heart of future strategies
Contract Logistics Observatory’s Research 2024 finds that 80 percent of logistics companies have already taken steps to reduce their environmental impact, such as switching to electric vehicles and optimizing delivery routes.
This finding is particularly relevant for eCommerce, since multiple home deliveries have a strong impact on the carbon footprint and, therefore, need to find alternative and effective solutions to traditional Home Delivery, so as to meet the growing demand for sustainability coming directly from consumers.
Theme, the latter, also analyzed by the study “High Season 2024: Consumer Trends,” which revealed how Italian eShoppers are becoming more and more sustainability-conscious. On our blog, we dedicated an in-depth study to this discourse.
A concrete example that goes precisely in this direction is the adoption by online stores of Locker and Pickup Points, which allow deliveries to be bundled at a single destination, reducing emissions by up to 30 percent compared to traditional home delivery.
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Digitalization and Innovation 4.0
Logistics 4.0 is revolutionizing the industry, thanks to technologies such as Big Data Analytics, Artificial Intelligence and real-time monitoring tools. In fact, 65 percent of companies are already investing in digital platforms to improve delivery planning and optimize vehicle loading, according to the study.
For eCommerce, these innovations mean more accurate delivery estimates and a smoother customer experience, with real-time updates on the status of orders and their delivery, whether scheduled at home or at a Delivery Point.
Flexibility for the modern consumer.
Another interesting and useful piece of data relates to the percentage of consumers who request customized delivery methods, based on their needs. Thus, one of the main challenges facing online stores is flexibility.
The study shows that 70 percent of consumers demand customizable and more flexible delivery methods as consumers’ daily habits change rapidly.
The pandemic has accelerated this trend, prompting 50 percent of eCommerce businesses to implement Out Of Home solutions for their shipments to meet new market demands.
In short, consumers want to be able to choose where, how and when they pick up their orders. Online stores can only accommodate this demand.
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What eCommerce can (and should) do to effectively respond to new demand demands
At this point, the question that remains is: what can and should companies selling online do to effectively respond to the new demands put forward by demand, that is, by consumers?
Here are some insights from Contract Logistics Observatory’s Research 2024.
Investing in integrated technology solutions
The adoption of advanced technological tools is critical to managing the increasing complexity of logistics operations and meeting the demands of modern consumers.
eCommerce companies can focus on:
- Transportation management systems (TMS) and warehouse management systems (WMS), which enable optimization of delivery routes, real-time inventory management, and improved operational efficiency.
- Artificial Intelligence and Machine Learning, tools to analyze historical data and predict peak demand or logistical issues. In fact, AI can optimize operational flows, increasing efficiency by up to 30 percent.
- Blockchain for traceability, used to provide transparency throughout the supply chain, increasing consumer trust and improving returns management.
Investing in these technologies is not only a strategic choice, but a necessary step to maintain competitiveness in a rapidly changing market.
Collaborate with innovative partners
Companies can benefit from strategic partnerships with advanced logistics solution providers and operators specializing in Out Of Home systems, just like GEL Proximity.
Indeed, this approach makes it possible to:
- Having access to established infrastructure by working with partners who already have networks of Lockers and Collection Points, thus reducing implementation time and costs.
- Sharing innovation by partnering with technology startups or industry players who can accelerate the introduction of innovative solutions such as automated delivery systems or self-driving vehicles.
- Ensure greater omnichannel integration by working with partners capable of delivering a consistent customer experience across multiple channels (online and offline) by increasing loyalty and improving competitive positioning.
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