"We believe that e-commerce companies will have greater needs for logistics and less infrastructure to support these needs which will require a high level of outsourcing." That was one of the conclusions drawn at the annual Technology Conference sponsored by Bear Stearns, multi-faceted asset management firm (www.bearstearns.com).

    Here are excerpts from the firm's report on the panel discussions held at the conference. Companies represented in the discussions included freight exchanges/marketplaces (ground, air and ocean), freight optimizers and auditors, on-line ASP logistics tool providers, logistics software providers, secure information providers and international trade logistics service providers.

    The Market is Enormous... Last year, total logistics costs accounted for 9.9% of the U.S. economy, or about $920 billion. While not all of this market is outsourceable to third parties, the large majority of logistics services already is, or should be over time. Our 2000 estimate for the size of the third-party logistics market in the U.S. is $64 billion, with another $75 billion globally. The market has been growing at a rate of 15% per year for the past five years, and we expect this pace to accelerate over the next few years with the increased focus on supply-chain management.

    Growth in e-commerce spurs the need for e-gistics (and conventional logistics) services in our view... Our view is that the growth in e-commerce will contribute to high growth for e-gistics companies as well as increased growth (above 20%) for the leading conventional logistics providers. Using the Forrester Research projections for growth in e-commerce, we project a market for third party logistics from the e-commerce players of nearly $11 billion in 2000, growing at a CAGR of over 70% to $100 billion in 2004. With the added growth from e-commerce, we estimate that the total third-party logistics market (e-gistics and conventional logistics) will grow at 30% to 35% annual rates through 2004.