What Is Logistics Management? Examples and Top Technology for 2025

From warehouse to doorstep, uncover the importance of logistics management in creating a seamless retail journey for your business.

When a customer places an online order, a complex process takes place behind the scenes. What might seem like magic is in fact the result of robust logistics management, a quiet yet essential driver of ecommerce operations. 

From checking stock availability in warehouses to orchestrating the journey of an item across cities, countries, and even continents, logistics management lies at the heart of it all. Your success as a retailer hinges on managing these processes to achieve operational excellence and ensure customer satisfaction. 

Effective logistics management equips you with the knowledge to optimize your logistics operations. Here’s how to do it.

What is logistics management?

Logistics management is the process of planning, executing, and controlling the forward and reverse flow of goods and information. It covers everything from raw material purchase orders to a customer’s return label. The goal is to make sure every unit arrives where and when it should at the lowest possible cost. 

Logistics carries real weight, as companies spent over $3.9 trillion on it alone in 2024, per Grand View Research. Core functions of world-class logistics include:

• Supply: Cultivate reliable suppliers and stagger purchase orders to prevent stockouts or overordering that ties up cash.
• Production: Sync material arrivals with factory schedules so machines, labor, and QA never idle or overproduce.
• Warehousing and materials handling: Receive, store, and pick inventory with barcode/RFID systems that balance carrying costs against service levels.
• Distribution: Manage carrier selection, route optimization, and last-mile handoffs to hit promised delivery windows.
• Returns (reverse logistics): Process unwanted items quickly—important since 16.9% of 2024 retail sales boomeranged back—to recover value and keep customers loyal.

For ecommerce operators, disciplined logistics management slashes carrying costs, boosts inventory turns, and frees cash flow for growth.

For shoppers, it delivers the table-stakes experience they now expect: accurate same- or next-day deliveries, no-hassle returns, and real-time order visibility. Brands that overcome both sides win on margins and customer lifetime value.

Key logistics models in 2025

Predictive algorithms and closed-loop flows are becoming levers for supply chains. 

AI-driven demand forecasting 

Research shows that AI methods significantly outperform traditional statistical methods in demand forecasting. 

Manufacturers and retailers have shifted towards deep-learning methods like long short-term memory (LSTM), artificial neural networks (ANNs), and multilayer perceptrons (MLPs), as these more effectively handle complex multivariate data like location, traffic, and weather, leading to higher forecasting accuracy.

Retailers can now shrink safety stock and cash tied up in inventory. These systems spot micro-trends hours after they surface, so planners can reroute supply before their competitors. 

For example, say a TikTok influencer featured your product and demand rose overnight—similar to what happened when Kaelyn White (351,900 followers) featured The Ordinary’s peeling solution. The brand saw a 427% lift in units sold on its website, per Vogue.

That will throw any ecommerce brand’s forecasting off. With AI models analyzing data in real time, logistics teams can ramp up production or reposition stock to capture customer demand rather than lose sales to back orders.

Circular supply chain frameworks

Circular logistics means recapturing products for resale, repair, or recycling. It turns waste streams into profitable inventory and can insulate brands from rising “zero-waste” regulations, like the NYC Zero Waste Act and Washington’s Sustainable DC 2.0 Plan.

Investments in circular logistics have already kept six million tons of materials in circulation, and have avoided 17.5 million metric tons of greenhouse gas emissions, as detailed in a Closed Loop Partners Impact Report. 

In a typical circular supply chain, brands receive returned or rented products from consumers. The items are sent through reverse logistics channels to sorting hubs and are sorted into categories:

• Resale items go directly to warehouses or stores as refurbished stock.
• Items needing refurbishment move to repair centers or remanufacturing plants.
• Unusable products are sent to recycling facilities to be converted into raw materials.

Refurbished or repaired items are reintegrated into regular inventory flows, and sold through dedicated circular economy marketplaces or existing retail channels.

Dress For A Night is a great example. The Australian fashion rental platform captures returns from customers, moves dresses back through their reverse logistics network, and carefully evaluates and repairs items for future rentals.

Modern logistics challenges

The intricate dance of ecommerce logistics is riddled with challenges. These hurdles require strategic planning to ensure seamless operations and continued customer satisfaction. Common challenges include:

Real-time inventory coordination

Retailers need a single source of truth for stock levels across the entire supply chain. Without a unified data pipeline, every promise date is really a gamble. 

Automated feeds from POS, WMS, and suppliers let planners reroute units before shoppers even notice a spike in demand. Inventory distortion—he combined cost of out-of-stocks and overstocks—drained $1.7 trillion from global retail P&Ls in 2024 per IHL Group, with out-of-stocks accounting for $1.2 trillion alone. 

Smart retail technology solutions are available to help retailers combat this. RFID tags are being used to track inventory from factory to checkout counters, computer-vision shelf scanners can maximize product availability, and predictive analytics replenish stock before your PDP shows “sold out.” 

Treat inventory data as a product. Give it real-time SLAs, expose it via APIs and native integrations to every shopper touchpoint, and create expectations so merchandisers can pivot faster.

Sustainability and ESG requirements

Global regulations are becoming more strict for retailers. 

• The European Union’s Digital Product Passport requires complete information about each product’s origin, materials, environmental impact, and disposal recommendations.
• The Extended Producer Responsibility (EPR) policy is pushing more US companies to take more responsibility for their impact on the environment. 
• In December 2024, China introduced Basic Guidelines for corporate ESG disclosure to align with global standards. 

Regulators and consumers want more hard numbers, not general claims. They want to see concrete evidence of environmental impact, like carbon emissions reduction, water usage, fair labor practices, and waste reduction. For example, large firms trading in California must disclose Scope 3 emissions beginning with 2026 data, making carrier-level carbon emissions a critical metric. 

In 2024, Allbirds published their annual sustainability report. It showed a 22% reduction in carbon emissions, which reduced Allbirds per-product carbon footprint to 5.54 kg CO2e, as the company worked to cut this number in half by 2025. 

Resilience and risk management

Wars, weather, and cybersecurity events can shutter a trade route overnight. Retailers now face the challenge of anticipating, deciding, and rerouting faster than news cycles. 

When Houthi drone strikes in the Red Sea forced carriers to detour via the Cape of Good Hope, global trade dropped 1.3% as carriers had to reroute around the southern tip of Africa instead of passing through the Suez Canal, adding 10 extra days to trips between Europe and Asia.

Reuters

After a disruption hits, companies still need an average of two weeks to plan and execute a response, per McKinsey, much longer than the typical cycle for sales and operations planning. 

Emerging logistics technology in 2025

Predictive analytics and automation

Predictive analytics layers machine-learning models onto historical and live supply-chain data—orders, weather, traffic, pricing, even social chatter—so planners can spot demand swings or disruption risks.

These tools are becoming more popular and effective. An AI and analytics report found that 91% of organizations view AI as critical in the next two years, and the market has already reached $18.89 billion in 2024, and is forecast to grow at a rate of 28% through 2030.

Walmart recently cut its unit cost by 20% year over year with automated fulfillment centers. By the end of 2025, the brand expects automation to drive an over 30% improvement in cost reduction, John Furner, president and CEO of Walmart US, said in an April 10 investor meeting. 

IoT and real-time tracking

Logistics tech is moving from visibility to actionability. Internet-of-Things sensors like temperature probes, BLE tags, and telematics in trailers stream condition data in real time to logistics platforms. 

A 2024 Maersk survey of over 500 global logistics leaders ranked the IoT the second-most relevant trend. The shipping and logistics company expects IoT-enabled automation to lead to performance lifts of 10%–20% within a year and 20%–40% within four years once deployed at scale.

Continuous visibility turns blind spots (Where’s my container?) into proactive control. You can trigger automated detention fee alerts, predict ETA variances hours earlier, and flag temperature excursions before product spoilage. With real-time information on what’s happening in the field, supply chain teams can cut costs and deliver a level of transparency customers now expect. 

Top 2025 logistics management software

Here’s a look at leading logistics management software solutions:

1. Shopify Order Management and Delivery
2. ShipStation
3. Shippo
4. AscendTMS
5. NetSuite ERP
6. Fishbowl
7. Brightpearl
8. Cin7 Orderhive
9. Logiwa
10. Returnly

1. Shopify Order Management and Delivery

Shopify Order Management and Delivery is an out-of-the-box feature included with the Shopify platform. Use your unified platform to fulfill your orders, manage your inventory, save on shipping rates, and create a great post-purchase experience. Shopify makes logistics easy with order-management and order-fulfillment solutions, and dashboards to track it all. 

2. ShipStation

ShipStation is designed to streamline order fulfillment. Its features include automated shipping, real-time rate calculations, and multi-carrier support. The platform effectively handles high volumes of orders, reducing manual work and boosting overall efficiency.

3. Shippo

Shippo offers an easy-to-use platform for businesses to manage all their shipping needs. It integrates with multiple carriers, provides discounted shipping rates, and offers a suite of powerful features like delivery tracking, analytics, and label printing. The platform can help you improve your shipping processes and enhance the delivery experience for your customers.

4. AscendTMS

AscendTMS is a transportation management system designed to simplify logistics management. It offers features such as load and dispatch management, route planning, route optimization, fleet management, load financials, and profit monitoring. By consolidating these tasks, you can save time, reduce costs, and make informed logistics decisions.

5. NetSuite ERP

NetSuite ERP is an enterprise resource planning tool that combines various logistical processes. It offers features for financial management, order management, inventory tracking, and supply chain management. Its holistic approach can help with a unified view of your business, driving informed decision-making.

6. Fishbowl

Fishbowl is a warehouse management system designed to streamline inventory management. With features like barcoding, asset tracking, and order management, Fishbowl provides a system for retailers to keep tabs on their inventory, ensuring accurate stock levels and timely order fulfillment.

7. Brightpearl

Brightpearl is a retail operating system that integrates inventory management, order processing, customer service, and accounting. Its real-time reporting and automation capabilities can help you make data-driven decisions and enhance efficiency.

8. Cin7 Orderhive

Cin7 Orderhive is a comprehensive order management system. It allows you to streamline your order processing, shipping, and inventory management. Its automation features and real-time inventory updates are designed to reduce manual work and increase operational efficiency.

9. Logiwa

Logiwa is a warehouse management system for optimizing warehousing and order fulfillment. It offers robust features like real-time inventory tracking and order routing. By leveraging Logiwa, you can improve your warehouse operations and reduce errors.

10. APLANET

APLANET is a sustainability analytics platform that consolidates a company’s ESG metrics into one dashboard. It pulls carbon, energy, and waste data from ERPs and IoT sensors and stores every KPI-standard (like GRI, ESRS, SASB, and more) in one auditable repository with version control. 

APLANET helped Walmart de Mexico y Centroamerica cut its annual ESG data-collection window from six months to just two after deploying APLANET across 3,750 stores and distribution centers.

Tips for logistics management optimization 

Building a robust logistics-management plan is a crucial undertaking, particularly for large businesses managing complex operations across borders. 

Here are tips on effective logistics management that can increase revenue while minimizing pain points and avoiding potential disruptions:

1. Centralize your logistics information
2. Embrace automation
3. Master inventory management
4. Optimize your warehouse layout
5. Cultivate strong supplier relationships
6. Harness the power of a robust fulfillment network
7. Prioritize sustainability
8. Keep your logistics plan updated
9. Implement the IoT for warehouse efficiency

1. Centralize your logistics information

Set up a logistics management system to store all your data in one place and increase transparency across your supply chain. A centralized hub provides real-time visibility, enhancing decision-making speed and coordination across different aspects of your supply chain. With access to the same data, you can avoid discrepancies, streamline operations, and cut costs.

2. Embrace automation

Automation has become key in logistics management. It eliminates manual errors, reduces repetitive tasks, increases process efficiency, and frees up your team for strategic tasks to personalize experiences for your customers. Consider different ways to incorporate automation—whether that’s software for inventory updates or using robots in your warehouses.

Machine-learning tools can also provide predictive insights, optimize delivery routes, and enhance overall supply chain performance. Staying at the forefront of technological advancement can improve your business operations and give your company a competitive edge, with capabilities like real-time access and real-time monitoring.

3. Master inventory management

Effective logistics management requires precise inventory control. Implement systems to provide real-time updates and insights into your inventory levels, minimizing both stockouts and overstock scenarios. Accurate demand forecasting is crucial for inventory management. It ensures your stock levels match market trends. Use omnichannel inventory optimization to gain visibility across all channels.

4. Optimize your warehouse layout

The layout of your central warehouse directly impacts the speed and accuracy of ecommerce fulfillment. By organizing your warehouse for maximum efficiency, you can streamline operations and reduce picking errors. Regular reassessments and adjustments to warehouse layout can also lead to cost savings.

5. Cultivate strong supplier relationships

Establishing reliable relationships with your suppliers ensures a consistent supply of quality products. It also helps reduce potential disruptions in your supply chains. Approach these as strategic partnerships that contribute to your overall success.

6. Harness the power of a robust fulfillment network

Using a trusted fulfillment network, such as the Shopify Fulfillment Network, can drastically improve your logistics processes. It streamlines order processing, order fulfillment, inventory management, and shipping, which ultimately leads to elevated customer satisfaction. 

7. Prioritize sustainability

Sustainable practices in logistics are more than just an environmental responsibility. They can enhance your brand positioning and broaden your customer base. Optimizing routes for fuel efficiency and using eco-friendly packaging can contribute to your business’s long-term sustainability.

8. Keep your logistics plan updated

Given the rapidly evolving dynamics of logistics management, regularly updating your logistics plan is vital. This allows you to accommodate market changes, new supplier capabilities, and emerging technologies.

9. Implement the IoT for warehouse efficiency

Retailers are chasing real-time visibility and maintenance savings, as evidenced by the $11 billion market for the IoT in warehouse management. 

Outfit your warehouse with IoT sensors like RFID tags on pallets, Bluetooth beacons on pick carts, and machine-health monitors on conveyors. You’ll turn every asset into a live data source and cut unplanned downtime. 

Start small with a high-impact lane, such as tagging fast-moving SKUs and forklifts, then pipe the sensor feeds into your WMS. Once alerts run automatically (e.g., low battery, temperature excursion, congestion at a pick zone), layer on analytics to reroute tasks or trigger maintenance before breakdowns occur.

Types of logistics management

Each type of logistics management has its unique set of functions, objectives, and strategies, molded to suit the specific needs of a business or industry. Understanding the different types of logistics management is crucial to determining which approach will best suit your business operations.

Here are some of the most common types of logistics management, along with their function and role in supply chain management.

Inbound logistics management

This is the management of all incoming resources that a company needs for production. It includes raw materials, equipment, and information. The responsibility here is to ensure that resources arrive in good condition and at an optimal cost.

Outbound logistics management

Outbound logistics management handles the storage and movement of the final product from the end of the production line to the end user. The goal is to deliver the product to the customer in the shortest time possible while maintaining product quality and minimizing costs.

Reverse logistics management

The process of logistics management doesn't always end with the delivery of the product. With the rise of ecommerce, the process of handling returns, also known as reverse logistics, has become crucial. This involves managing all the processes associated with products returned from customers including refunds, repairs, and replacements.

Third-party logistics (3PL) management

Some businesses outsource their logistics management to third-party logistics providers. These 3PL companies offer comprehensive services that include packaging, warehousing, transportation, and inventory forecasting.

Fourth-party logistics (4PL) management

A step ahead of 3PL, 4PL is when manufacturers outsource all aspects of their supply chain to an external provider. The 4PL provider is a single point of contact, managing the supply chain by organizing and overseeing resources, packaging, warehousing, shipping, and transportation.

Distribution logistics management

This type of logistics management is responsible for moving products from a central warehouse to distributors, retailers and customers. It is a broad field that includes activities such as packaging, inventory management, warehousing, freight forwarding, and order processing.

Production logistics management

Production logistics management synchronizes all phases of the production process including procurement, manufacturing, processing, and delivery. It aims to ensure that each operation is timely and efficient.

Digital logistics management

With technological innovations, digital logistics is becoming increasingly popular. This involves the use of technology, specifically automation and digitization, to improve efficiency and effectiveness in logistics operations.

Logistics management FAQ

What are the key functional areas of logistics management?

The main functional areas of logistics management include demand forecasting, inventory management, warehouse management, order fulfillment, transportation, and customer service. These areas collaboratively ensure that goods get to the right place at the right time.

How should a company respond to disruptions in logistics management?

Companies should respond to logistics disruptions with a contingency plan, quick decision making, and transparent communication with all partners and stakeholders. This approach enables them to mitigate the impact, identify alternative solutions, and maintain brand trust.

What performance metrics are tied to efficient logistics management?

Tracking metrics like order accuracy, order cycle time, cost per order, fill rate, and return rate provide insights into how well your logistics system functions and where improvements are needed.

What logistics management processes will improve my supply chain?

Investing in logistics management technology, building strong relationships with suppliers, understanding your distribution network, and leveraging the power of a robust fulfillment network will significantly improve your supply chain.