T he collapse of the Francis Scott Key Bridge in Baltimore illustrates all too clearly how perilous the world can become for supply chains. A disaster can close a port, forcing shippers to reroute loads at a moment’s notice. Attacks on shipping in the Red Sea and a drought that has curtailed traffic through the Panama Canal are also making shippers rethink their logistics strategies. Wars, geopolitical tensions, inflation, and other trends complicate supply chain strategies as well.
Add to that the day-to-day challenges of supply chain management—routing shipments, scheduling labor, meeting customers’ ever-more-stringent requirements—and it’s no wonder demand is growing for information technology (IT) solutions that address logistics and supply chain management. According to Inbound Logistics ’ latest survey of the logistics IT market, 86% of logistics IT vendors have gained more customers over the past 12 months. As we do each year, Inbound Logistics surveyed a broad assortment
of logistics technology providers, asking for their views on the current market. We then compiled and analyzed their responses, providing insights that we hope will help logistics professionals find new technologies to support their own operations. Once you’ve read the 2024 survey results, turn to this year’s Inbound Logistics Top 100 Logistics & Supply Chain Technology Providers (see page 52) , a valuable reference as you explore how best to invest in technology to serve your company’s specific needs.
PRICING MODEL: How do your customers pay for your solutions? 59 %
System
PRICING MODEL: How do your customers pay for your solutions? 59 % PRICING MODEL: How do your customers pay for your solutions? 59 % Transactional
53 % Although many technology vendors offer software-as-a- service by subscription, the practice of buying a solution outright still plays a significant role. Fifty-nine percent of the IT vendors we surveyed this year offer system- based pricing, up from 41% in 2023. And a markedly smaller proportion of vendors this year have customers who subscribe to technology based on transaction volume—53% vs. 77% in 2023. 43 % 53 % Companies that want to pay by the seat or user will find that option with 43% of vendors this year. And 5% of vendors offer technology at no cost. That arrangement typically occurs when a partner such as a 3PL provides an IT solution as part of a broader array of services. 43 %
PRICING MODEL: How do your customers pay for your solutions? 59 %
System
System System
53 %
53 % Seat/User Transactional
Transactional
Transactional
5 % Seat/User No Cost
43 %
Seat/User
43 %
5 %
Seat/User 5 %
No Cost
No Cost
5 %
No Cost The vast majority of vendors in the survey—90%—report they serve customers in the supply chain, Retail logistics, and transportation sectors. This is no surprise, since many of the technologies they sell fill the needs of 3PLs, carriers, and other service providers as well as the needs of shippers. Manufacturing (all) Those shippers are most likely to come from the retail (78%) or Retail Food & Beverage manufacturing (77%) industry. Both of those sectors appear to be stronger markets for logistics IT than they were in 2023, when 61% of vendors said they served retailers and the same proportion provided technology to manufacturers. Two other strong Manufacturing (all) Food & Beverage sectors are the food and beverage industry and wholesale businesses, each mentioned by 70% of vendors who completed the survey. Wholesale Ecommerce Industrial
INDUSTRY: What industries do your solutions serve? INDUSTRY: What industries do your solutions serve?
INDUSTRY: What industries do your solutions serve?
90 %
90 % Supply Chain, Logistics, and Transportation Supply Chain, Logistics, and Transportation
Supply Chain, Logistics, and Transportation
78 %
INDUSTRY: What industries do your solutions serve? Retail
78 %
78 %
Retail
90 %
77 %
Supply Chain, Logistics, and Transportation Manufacturing (all)
77 %
77 %
70 %
Manufacturing (all) Food & Beverage
78 %
70 %
70 %
70 %
Food & Beverage Wholesale
70 %
77 %
66 %
70 %
Ecommerce
66 %
Wholesale
70 %
66 %
Industrial
66 %
66 %
27%
Ecommerce Government
70 %
27%
Wholesale Government
66 %
17%
April 2024 • Inbound Logistics 45
Industrial Other
17%
66 %
Ecommerce Other
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