Adapting to digital e-commerce by the logistics companies
As with all aspects of commerce, online retail is affecting the storage and distribution and the overall logistics services provided by freight forwarders from the International Forwarding Association as well.
Today, the average consumer is relying mainly on their smartphone to purchase all kinds of goods and services – from grocery shopping to making serious investments. Customers expect a growing choice of products, better prices, discounts, and further convenience when it comes to payment and speedy delivery by the national and international freight services.
The European logistics network and businesses dealing with international freight services need to keep in line with the technological advances and the boost of online commerce.
In actual physical retail, the logistics network needs to be efficient, with minimal inventory and effort and at a lower cost. Also, the sales are done at multiple even hundreds physical sales points, which requires the allocation of regional distribution centers in all areas, all with local staff which serves the customers who come to shop.
In online commerce, the retailers and the companies from IFA can rely on one single call center which can be located just about anywhere which handles the customers online or remotely via phone or other communications. The actual storage and distribution centers can be located remotely from any one or more cities.
The members of the freight forwarders association then need to handle the distribution and the small shipments and other types of freight forwarding and deliveries to the home addresses of hundreds, thousands and even million customers.
When redesigning such a network into a digital one, the first step is to work on the customer service. Here are the main factors which the international freight forwarders association needs to keep in mind when doing that:
- Predictability and the size of the orders – with e-commerce the orders are usually smaller and are less predictable than those shipped to actual physical stores
- Destinations – the customers ordering online can be located just about anywhere
- International freight forwarding destinations – these can be quite complicated as compared to traditional shipping for distribution
- The returns logistics management – the return rates for online purchases are much higher than those in traditional retail. The main reason is that the customers are unable to physically see, touch or try the products they are purchasing via the internet
With so many traditional retailers rushing to join the online retail business, many were tempted to promise the customers conditions which have affected their profit and their finances. The offer for free delivery is a perfect example. The same goes with offering rock bottom prices or express delivery which for many retailers has turned into a serious financial burden and even the closing up of business.
Retailers of mass-produced goods in China may offer products at low price and free shipping, but their delivery is usually done via sea transport which is cheaper but takes a much longer time than normal deliveries. This is the price which the customers pay for the low prices and the free shipments.
E-commerce has been particularly successful for goods like electronics, sports apparel or fashion goods. This is good news for the freight forwarders directory as they are relatively easy to dispatch by post, unlike foods and other perishable goods which need refrigeration transport or other specialized transportation.
So for easy to post products, the members of the members of the freight transport association and the logistics companies can organize their networks by organizing:
- Large fulfillment centers with a warehouse where the parcels are picked up for shipping
- Parcel hubs which are close to these centers where the parcels are sorted by postal code
- Local parcel delivery centers – these are for the last mile deliveries to the addresses of the online buyers
The companies from the European logistics network need to take advantage of the fact that in e-commerce all of the interactions are digital, which means it can be collected, stored and analyzed. This can help optimize the logistics services provided by the list of logistics companies for a more profitable and efficient business.