Lior Yafe
Economic Counselor of the Embassy of Israel in Mexico
Embassy of Israel in Mexico
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Expert Contributor

Israeli Innovation in Supply Chain Logistics

By Lior Yafe | Mon, 02/28/2022 - 17:00

When it comes to expectations for providers of goods these days, consumers demand fast, error-free services. Whether it is fresh milk from the supermarket or an imported electronic device made on the other side of the world, people want their purchases to arrive quickly and efficiently. While this demand may seem ambitious, it is one that the global supply chain industry is doing its best to achieve, taking great strides to make it a reality.

E-commerce is growing at an exponential rate, with an estimated US$4.28 trillion in sales in 2020. In 2022, revenue is estimated to reach US$5.4 trillion, according to Statista.

The digital revolution, the COVID-19 pandemic and the need for convenience are behind this e-commerce boom. Global lockdowns made e-commerce the main source for consumers to get their products. The winners of this boom were large retailers that had an efficient supply chain and logistics infrastructure to meet consumer needs.

In general, consumers expect impeccable service when shopping online; fast delivery, undamaged products at a good price. However, few people realize what happens between the moment they buy a product and the moment it arrives at their doorstep. Efficient monitoring and control of such an operation in real time requires tools to properly manage supply chains.

From purchase to delivery, the retail e-commerce space is supported by a complex logistics and supply chain industry that is improving at a rapid pace to meet the needs of businesses and consumers collectively. The smarter your supply chain and logistics infrastructure, the higher your customer satisfaction will be as you meet high consumer expectations.

The logistics and supply chain sector is expected to grow to a value of US$37 billion in 2027 as consumer demands continue to rise.

For companies that want to benefit from this e-commerce boom, they have to implement strategies that allow them to deliver goods in the fastest and most efficient way. A key area of ​​investment should be logistics and supply chain technologies.

As we witnessed with the COVID-19 outbreak and again more recently with the blockade of the Suez Canal, supply chains are fragile and any disruption in one place causes a ripple effect that is felt around the world.

Adopting innovative technologies to improve supply chain efficiency is a benefit for everyone. Among the benefits of creating an intelligent supply chain are cost reduction, increased transparency and confidence in the process, improved response when there is a problem and forecast shortages of certain products in the future. In addition, it is important to consider that the manufacturing and transportation industries are the largest producers of gasses that are harmful to the environment, so by implementing technologies that make these processes more efficient, you are helping the global environment.

When you think about investing in supply chain technologies, Israel's tech ecosystem is a good starting point. Israel has over 150 companies engaged in various aspects of the sector that use technology and innovation to ensure that goods are delivered quickly and efficiently.

Here is a look at how some of those companies are driving supply chain innovation:

  • Freightos provides an online marketplace where companies can compare air, ocean and tracking quotes from a vast global network of freight providers, with on-demand tracking and live updates. Founded in 2012, the company has secured US$94.4 million in financing from investors such as Aleph VC, GE Ventures, OurCrowd and Singapore Exchange.
  • Bringoz's end-to-end SaaS logistics platform provides automated real-time delivery capabilities, including route planning, scheduling and optimization.
  • A leader in trust chain management, BT9 helps preserve food safety with its Xsense® monitoring system, which provides real-time monitoring, data analysis and alerts throughout the entire cold chain life cycle.

It is a reality that the world is facing a transformation in the logistics sector and smart supply chain technologies, all exacerbated by the massive increase in e-commerce that we have been seeing in recent years. In this sense, companies must use innovation as a tool that will help them to continue promoting and making their supply chains more efficient. That is why Israeli startups are taking that leadership, innovating with factors such as big data and deep tech to continue offering solutions that propel the logistics sector into the future.

Photo by:   Lior Yafe