Digitalization as a Key Factor in Developing Logistics Services Market in the Context of the Covid-19 Spreading

Abstract

Over the past decades, there have been significant changes in organizational forms, tools, technologies for managing companies’ logistics and supply chains. This is mainly the result of the business digitalization paradigm caused by the growth of logistics costs in recent years. Massive outbreaks of COVID-19 and restrictive measures introduced at the state level to prevent the spread of coronavirus have had a strong negative impact on the efficiency of the global economy in the first months. The coronavirus also severely disrupted logistics activities, as air travel was cut, seaports closed and workers were at risk. According to the National Bureau of Economic Research (NBER) estimates, the drop in GDP from restrictions in 64 studied countries of the world can reach 31.2%, and a third of this decline is due precisely to gaps in global supply chains. However, after the lifting of restrictive measures, the size of the global logistics market may grow from USD 2734 billion in 2020 to USD 3215 billion in 2021, which will amount to 17.6% on an annualized basis [1]. In these conditions, logistics providers need to quickly increase capacity, diversify routes, increase network flexibility and resiliency, and reduce costs. Achieving these results will depend on how quickly and comprehensively the logistics companies automate and digitize. The Russian logistics and supply chain management (SCM) market is still at an early stage of development, and many companies are just beginning to explore the possibilities of logistics outsourcing and service provision. Therefore, the issues of digitalization are not yet of primary importance for them. The analysis carried out in the article showed that in the context of the global digitalization of the economy, an advantageous geographical position on the path of movement of trade flows from Asia to Europe ceases to be a clear competitive advantage. In these conditions, Russian logistics companies need large-scale automation and digitalization.