Distribution and logistics is undergoing radical change driven by: globalisation, increased competition and focus on logistics strategies, and integration into value chains of client industries. Market entries and exits are relatively rare and demand for integrated logistics services is driving consolidation. Adoption of e-commerce, e-business and digital delivery initially focused on customer relations and market reach, subsequently on integrated logistics. E-commerce is widespread but it accounts for a small share of sales and purchases. Applications are extensive in wholesale distribution in pharmaceuticals, motor vehicles and professional and commercial equipment; transport tends to be lower.
New business models in the supply chain are more information intensive and time critical. B2C e-commerce has benefited wholesale distributors but they face competition and disintermediation from small package deliverers and digital delivery of products. Distribution and logistics service providers are extending their reach, enhancing services and expanding after going on line. Technologies that extend transparency and information immediacy are crucial. Radio frequency identification devices (RFIDs) are the leading-edge driven by customer demand and falling costs, but there are challenges with standards, data integrity, integration and consumer resistance. Governments can help further develop ICT applications through attention to: bandwidth; compatibility, interoperability and standards e.g. for RFID; open Internet-based systems; privacy, security and confidentiality; payments and authentication; quality certification and accreditation of service providers; education and skills; and by serving as model users.