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SANTA CLARA, CA: March 28, 2018. A report from consulting firm Frost & Sullivan (F&S) says spending on global logistics will reach US$10.6 trillion by 2020, with transportation accounting for 70 percent of the total.

The company predicts the market will move toward “mobile freight brokerage-type”, on-demand deliveries using autonomous technology including drones and delivery bots.

SF AirlinesFurther trends include digital freight brokering platforms that reduce empty miles by eight to 10 percent; a shift towards low-emission and zero-emission solutions; fleet operators developing urban distribution centers; and retailers focusing on compact stores to reduce capital expenditure and bring products closer to a growing urban customer base.

"Spiraling last-mile delivery costs and changing customer demands are causing retailers to rethink their strategies and look toward new business models such as click-and-collect, locker boxes, on-demand, and autonomous solutions," commented Vijay Narayanan Natarajan, an F&S senior research analyst. "Moreover, the influx of start-ups in logistics has enabled innovative solutions that not only provide value-creation customized solutions for the consumer, but also tackle the inefficiencies currently witnessed."

With 40 percent of overall logistics costs associated with the last mile, emerging technologies such as cloud computing, big data and crowdsourcing, coupled with an influx of tech-savvy start-ups, “are unbundling the value chain and transforming delivery models,” said the company.

Earlier this week, courier company SF Express said it had been awarded a government license to operate drones in China. Last month SF Airlines took delivery of its 20th B757-200 freighter. The airline's fleet of 42 freighters includes B737, B757 and B767s.

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