Key takeaways

The logistics technology market comprises businesses involved in the development of software for logistics and supply chain applications. Players typically also provide associated hardware (e.g. GPS trackers) and services (e.g. maintenance), serving as one-stop-shops. We segmented the European market by offering into (i) fleet telematics, (ii) logistics-focused ERP, (iii) transport management software and (iv) parcel delivery and e-commerce software.


Overall, the European logistics technology market remains fragmented. Large international players lead the pack in more mature segments (e.g. transport management software), with smaller local champions and incumbents with specialised niche offerings (e.g. post-purchase logistics software) making up the remainder of the competitive landscape. Consolidation has been picking up in recent years as scale becomes increasingly important in this winner-takes-most market. In the long run, the anticipation is that non-differentiated mid-market players will be pushed out of business, while giants and niche specialists will retain their right to exist (interview by Gain.pro).


Investor-led interest has been significant with ~80% of identified European assets backed by financial sponsors (July 2022). Strong top-line growth prospects, high customer stickiness and the potential for buy-and-build plays are considered to be the most attractive factors for investors. Typical EV/EBITDA multiples can amount to as much as ~20.0x for established companies.


Logistics technology players can play an important role in optimising their customers’ carbon footprints. Logistics software systems allow for real-time data insights which, in turn, can optimise routing and therefore reduce unnecessary fuel consumption and environmental pollution through more efficient logistical processes. At the same time, the industry will need to address the structural shortage of skilled IT specialists, with such talent simply being necessary to keep pace with the industry’s technological developments.

Company benchmarking

Market growth

Statista (June 2022) estimates that the global supply chain software market grew from ~$12.8bn in 2016 to ~$16.9bn in 2021, representing a ~5.7% CAGR. The top five players account for ~40% of the global market. By 2027, the market is expected to reach ~$23.2bn (~6.5% CAGR 2022-2027)

McKinsey & Company (December 2018) predicted a YoY growth rate of ~23% for the global fleet telematics market, growing to ~$75bn from 2019-2025. Berg Insight (June 2022) valued the European TMS market at ~€0.9bn in 2021, expecting the market to reach ~€1.5bn by 2026 (~9.7% CAGR)

The European parcel delivery and e-commerce software market is expected to grow ~15-20% YoY in the coming years (interview by Gain.pro)

Positive drivers

Rise of emerging technologies (e.g. AI, IoT) and increasing digitisation (e.g. granular, real-time data) of supply chains will continue to drive demand for integrated logistics software. The global supply chain disruptions induced by COVID-19 will act as a further catalyst for investment to optimise logistical processes (Arrowpoint Advisory, February 2021)

Worldwide shift from offline to online retail paired with significant growth in B2B e-commerce (interview by Gain.pro). This simultaneously calls for increased process automation through (logistics) software, to lower e-commerce players’ reliance on expensive human resources and alleviate pressure on cost structures (ORO Commerce, May 2022)

Increasing consumer awareness regarding ESG topics boosts the need for value chain transparency which, in turn, will accelerate demand for TMS products. Such software is believed to reduce (environmental) costs through greater transparency on the client’s logistical processes (interview by Gain.pro)

Negative drivers

High pace of technological advancements requires continuous iterations of players’ software packages. Vendors lacking sufficient in-house developers and/or the necessary R&D spending capabilities to keep pace with these advancements may be pushed out of the market as customers gradually switch to more innovative alternatives (interview by Gain.pro)

Emergence of entrants offering free open-source logistics software versus traditionally more expensive customer-tailored products provided by identified incumbents. Such cost-effective alternatives enjoy significant popularity among SMEs, which is exactly the market segment that offers the greatest growth potential (interview by Gain.pro)

Two-way lack of skilled IT personnel capping both the supply and demand side. Supply-wise, vendors struggle to find enough software developers. Demand-wise, clients often lack in-house specialists that are needed to operate the systems optimally (ARTS, April 2020), which potentially may lead to postponed investments in such technology

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Logistics technology industry.

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