Comprehensive Guide to Choosing the Right Logistics Software in USA


Comprehensive Guide to Choosing the Right Logistics Software in USA

The U.S. logistics industry is among the leading markets based on the Logistics Performance Index and is expected to touch $175 trillion in 2022 and $236.41 trillion by 2027 (CAGR of 6.2%). This growth is primarily driven by the booming eCommerce industry, which is further led by widespread internet penetration.

Along with the rising eCommerce industry, there’s also an increase in international trade, putting pressure on the logistics industry within the USA, demanding better and more efficient logistics software in USA to help businesses efficiently deliver the shipments on time and reduce the overall logistics cost.

Below, we talk about several factors that are driving the growth of logistics management software in the USA, challenges in the logistics market in the U.S., and how businesses can tackle those challenges to unlock growth.

Logistics Software in USA: Current Landscape

The eCommerce penetration in the U.S. has been steadily growing over the past couple of years, especially during the pandemic. So much so that the 2022 revenue forecast by Statista in the retail eCommerce in the U.S. was projected to be $904.9 billion by 2022 and a massive 1.7 trillion by 2027. And this rapid growth is boosting the logistics industry in the U.S.

However, the logistics market in the U.S. is fragmented. And because of the ongoing technological development, several new players have made their way into the logistics space, creating a highly competitive landscape and making it hard for businesses relying on conventional logistics systems to survive.

Therefore, logistics businesses operating in the U.S. market need to opt for modern and more efficient logistics software in the United States to not only survive but ensure growth for their business.

Let’s now shed some light on some important factors that are driving the growth of logistics software in USA.

Market Dynamics of Logistics Software in USA: Key Drivers of Growth

Growing E-Commerce and Reverse Logistics Operations

The increasing internet penetration and transition in consumer mindset are fueling the growth of the eCommerce sector in the U.S., And because of the mindset change, consumers now demand more convenience, transparency in their orders, speedy deliveries, free and frictionless returns, which is boosting the reverse logistics operations within the country. 

The growth of eCommerce and reverse logistics operations is putting pressure on logistics companies to meet the customer demands who’re still struggling with conventional logistics solutions. Logistics businesses need to opt for modern logistics software in USA to be able to facilitate the rising demands, offer more transparency, and ensure timely deliveries and frictionless returns.

Government Intervention and Trade Flows

The U.S. government is taking steps to improve efficiency in the supply chain industry, thus boosting the growth of logistics operations. Because of the rising globalization, international trade is also booming, i.e., more shipments are being moved from and to the country. This demands efficient logistics management software in the USA that helps reduces costs and ensure timely deliveries and seamless movement of goods.

logistics software in USA

Increase in Contract Logistics

Along with the rising eCommerce and reverse logistics, the contract logistics market is also growing and is expected to increase by $9.04 billion by 2026. This is happening because, with contract logistics, businesses need not invest in developing modern infrastructure, which saves time and money. 

However, as the demand rises further, it’ll become hard for companies offering contract logistics services to cater to the needs who’re already struggling with issues such as increased lead time, calling for efficient logistics software in U.S.

Rise of Tech-Driven Logistics Services

In addition to the increasing trade agreements and international trade, the rising technology adoption and tech-driven logistics services in the U.S. are also boosting the growth of the logistics industry. However, the rate of adoption is still poor, and businesses struggle with poor infrastructure, leading to high logistics costs, which act as a bottleneck preventing the growth of logistics businesses.

To deal with the above problem and to make the most of the U.S. logistics market, businesses need to adopt modern logistics management software solution in U.S. that helps automate operations, reduce overall costs, and thus unlock growth.

Logistics Software in USA: Market Restraints & Challenges

High Cost of Logistics

One of the prominent challenges in the logistics industry in the United States is the high cost of logistics. The overall logistics cost in the USA rose by over 22.4% from 2020-2021 as opposed to the annual growth rate of just 5.8% over the past five years.

The high logistics cost is mainly because of the fragmented logistics market and the lack of adoption of technological solutions. Because of this, businesses are unable to plan their shipments, track their movement and manage them, leading to delayed deliveries and empty backhauls, adding to the overall logistics cost.

However, with a smart and integrated logistics management solution, businesses can effectively manage their shipments, connect all the stakeholders, and have more visibility over the operations, improving the overall efficiency of the operations and thus reducing the logistics cost.

Complex Regulations

The logistics industry involves numerous agreements and stakeholders, making it quite complicated to manage. Therefore, to oversee all the operations, several federal agencies have been set up that ensure all the set regulations are followed by logistics companies. Here are some of the federal agencies that look over the logistics operations:

  • The U.S. Department of Agriculture (USDA)
  • The Environmental Protection Agency (EPA)
  • Federal Motor Carrier Safety Administrator (FMCSA)
  • The U.S. Department of Commerce
  • The National Transportation Highway & Safety Administration (NTHSA)
  • The Food & Drug Administration (FDA)

Also, if the shipments involve some specific products and have a certain country of origin, even more agencies could be involved. However, complying with all these regulations isn’t easy, especially when numerous logistics operations are often disconnected.

Logistics management software in the USA that connects all the operations within a business could help businesses comply with complex regulations easily.  

Lack of Control of Manufacturers on Logistics Services

Manufacturers or/and retailers often lack direct control over the shipments when they hand the shipments to the logistics service provider. Because of this, the manufacturers have to rely on the mercy of the logistics service providers, which significantly increases the risk of fraud, such as poor quality of products or even a breach of confidentially hindering the growth of businesses.

However, a smart logistics management software in the USA that connects different infrastructures such as WMS, OMS, ERP, and CRM, businesses can help manufacturers have better control of the logistics services enabling them to monitor everything with real-time alerts easily and thus manage their orders better ensuring better quality, customer satisfaction, and absolutely no discrepancies.

USA Logistics Software Market: Key Opportunities

Increasing Collaborations and Partnerships

The USA logistics market is a highly integrated supply chain network that connects consumers and producers through multiple modes of transport such as maritime, truck transport maritime, freight rail, air, and express delivery services. Because of this and other opportunities that the USA offers, several players in the market are collaborating and forming partnerships to tackle challenges such as inefficiencies and to ensure a seamless flow of logistics.

For instance, Penske Logistics (freight and logistics company), ROUSH Cleantech (leading testing, manufacturing, prototyping, and engineering supplier), and Proterra (electric vehicle technology manufacturer) have recently announced a collaboration for producing next-gen commercial electric trucks. Also, DHL Supply Chain (freight and logistics giant) announced a partnership with ReverseLogix (leading cloud-based platforms automating end-to-end logistics).

Such partnerships and collaborations are promoting the logistics industry and making it more technologically active and thus creating opportunities for the USA logistics software market because advanced solutions will be required to ensure seamless collaboration among businesses.

Research around the ‘Physical Internet’ (P.I.)

The existing manner of storing, transporting, handling, or managing freight is both environmentally and economically unsustainable. There’s widespread inefficiency in almost every aspect of logistics operations impacting the delivery time and increasing the logistics cost. 

However, there’s research going around the concept of the Physical Internet for improving logistics operations and creating supply chains that are efficient, effective, and long-lasting. This concept aims at shipping goods in modular containers across continents within short intervals, just like information is transferred over the internet. And as this concept relies heavily on technology, businesses will have to opt for modern logistics solutions, boosting the growth of the software market.

logistics software market USA

Venture Capital Flows into Digital Logistics Startups

The pandemic highlighted the true value and resiliency of the supply chain, which motivated venture capitalists to invest in the startups operating in the logistics industry. And over the period of three years (2019-2021), venture capital started flowing into logistics startups quite aggressively. So much so that the funding in logistics startups touched a record 24.6 billion in 2021 from just 12.2 billion in 2019.

Also, Project44, a supply-chain visibility startup in the U.S., received $202 million in funding, valuing the company at around $1.2 billion. And Flexport (a supply chain and logistics company) received funding of $935 million.

As the capital flows into digital logistics startups, new digital solutions will pop up that’ll help the logistics industry become more stable and efficient.

Shipsy: SaaS-Based Logistics Software in USA

Shipsy is an integrated end-to-end custom logistics management platform that helps logistics companies smartly tackle challenges and operate in a flexible, efficient, and scalable manner.

With Shipsy’s customizable logistics management platform, businesses can easily automate first-mile operations such as driver allocation, manage mid-mile by offering complete visibility, and speed up the last mile by offering real-time updates to businesses and even the customers. 

Shipsy offers a unified interface for carrier allocation, booking, and tracking allowing businesses to manage everything from a single dashboard and have full control of the logistics operations without having to rely on the mercy of a logistics service provider.

Also, with Shipsy’s AI-optimized route planning, businesses can smartly plan the most optimized route for their shipments to ensure the least fuel is spent and the assets are appropriately utilized, minimizing the overall logistics costs.

Moreover, with Shipsy’s data analytics, businesses can access crucial data whenever they want and use the same to improve their operations and make informed decisions.

And as Shipsy helps connect different logistics operations and enables seamless stakeholder collaboration, complying with complex federal regulations also becomes easy. 

In addition to the above benefits, Shipsy can help you achieve the following results: 

  • 34% reduction in incidental expenses
  • 12% reduction in freight cost 
  • 23% reduction in Last-Mile Delivery Cost
  • 28% reduction in customer complaints
  • 14% decrease in last-mile delivery costs
  • 32% increase in mid-mile vehicle utilization
  • 37% decrease in ETA SLA breaches
  • 64% increase in positive customer experience

To learn more and understand how Shipsy’s custom logistics platform can help your business unlock growth, book a free customized demo now!


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