“The e-commerce industry is growing” is a familiar story, but don’t let the persistence of that headline numb your eyes. E-commerce sales numbers are staggering, reaching over $123 billion in the first quarter of 2018. This steady growth has pressured everyone from retailers to carriers to keep up with consumer preferences. The trends are evolving almost as fast as the inventory is flying out of the warehouses:
Every time you blink, delivery times have gotten faster. With the leviathan Amazon setting the pace, consumers are now expecting all types of goods to be delivered within a matter of days, if not in the same day. This demand for almost instantaneous shipments, in addition to the increasing buy-and-return flow, has forced inventories out of large, remote warehouses and into smaller facilities near population centers. Carriers are now making shorter, more frequent trips with fewer goods per shipment.
The boundaries between parcel, LTL, and truckload carriers have blended and faded. Whether it’s a birthday present, a crate of bananas, or a couch, carriers have made efforts to be flexible and adapt to meet the demand for fast, reliable shipping of almost every type of good. Truckload carriers in particular have expanded their services to encompass last-mile delivery, which brings its own set of challenges.
Rising Reverse Logistics
To further challenge the greatest operational minds in the shipping industry, e-commerce shoppers have come to expect free returns—reverse logistics is now just as important as forward logistics. In fact, 79% of consumers want free return shipping and at least 30% of all products ordered online are returned (Source). It’s become critical for carriers and 3PLs to develop efficient, transparent reverse logistics processes, especially as retailers continue to offer faster deliveries and more lenient return policies.
More Detailed Tracking
E-commerce customers want to be able to check the status of their shipment at all times. This goes beyond the vague “in transit” notification and extends into live, up-to-the-minute tracking. The more transparency shippers offer consumers, the more loyalty is generated. The technology is still being developed and there is a lot of work to be done to align carriers on platforms that can accommodate this level of tracking detail, but the consumer demand is high for accurate and real-time shipment updates, down to the driver’s location.
Unconventional Delivery Methods
It’s no secret that Amazon is planning to use drones for the delivery of goods. And the company has already mobilized the general public (a.k.a. non-employees) to become at-will delivery partners with Amazon Flex. Uber is also making local deliveries with driver “partners” and potentially will expand into self-driving transport services. The goal is to offer super speedy delivery (with last-mile logistics in particular), which is driving the need for unconventional methods from hyperlocal carriers.
These e-commerce trends have created a surge of innovation in the shipping industry as shippers, carriers, and 3PLs develop new processes and services to meet consumer demand. In the end, the consumer holds the power and will shape how those in the logistics industry adapt.