Hindsight is 20/20. It’s too bad. If you use hindsight on some of today’s logistics news headlines, you would have gone out 8 years ago, during the real estate downturn following 2008, and picked up as many logistics centres as you could find.
While it’s not news that, on the coattails of the boom in ecommerce, logistics suppliers are definitely enjoying a golden age, if there is any doubt about it, you can simply take a look at some recent headlines
Global Ecommerce Logistics Market Growth of 12% CAGR – Citing the “growing market for ecommerce”, ReasearchAndMarkets.com predicts 12% annual growth in the ecommerce logistics market for the next 5 years, to 2021. In terms of dollars, that translates to $100 billion in forecasted growth during the period. Geographically, while North America and Europe dominate the space now, logistics in the Asia Pacific region is expected to have the highest growth rate though 2021.
$5 Billion Invested by Alibaba – China’s biggest ecommerce company, Alibaba, recently announced that its logistics affiliate, Cainiao Smart Logistics Network Ltd., was one of the big players in a group of investors in a fund raising $760 million stock sale by Best Logistics Technologies. Alibaba was joined by Goldman Sachs and the China Development Bank in the venture
Best Logistics was founded by the former head of Google in China and has 400 distribution centres in China, three in the U.S., and one in Germany. Combined with Alibaba’s almost $4.6 billion investment last year in Suning Commerce, a purchase driven mainly by the company’s logistics network, it brings their total logistics investment to about $5 billion in just the past year.
Closer to Home, Blackstone Bets Big – if there is one type of investment that shows the growth potential of any sector, it’s those that come from outside the industry. The world’s largest private real estate owner, Blackstone Group, has just spent $1.5 billion on a portfolio of logistics centres, totaling over 12 million sq. ft. of space. It’s a sign that logistics is so hot, investment companies are using it to speculate.
As in any boom time, there’s good and bad. While the news here is mostly good, speculative investments can create inflated valuations and bubbles. But if you’re an ecommerce player looking for a logistics company to help streamline your supply chain, the competition is heating up for your business and that’s always a good thing.