The Changing Business Environment – Are Traditional Logistics Providers Ready?

Cathy Roberson already features a lot of her articles on eft but here is her first exclusive column on ecommerce logistics

It’s no secret the Internet is changing how people interact with one another – social and commerce. As a result, the supply chain is transforming to meet these changing needs.

2013 was the year we witnessed the growth of a variety of delivery service options – Lockers, Click+,  Click and Collect, same day delivery and yes, even drone delivery. Traditional delivery providers such as DHL, FedEx and UPS, regional parcel delivery companies as well as post offices have all benefited from this explosive demand for parcel delivery.

Not to be left out, non-traditional service providers such as Ebay and Google have also jumped in and are now offering delivery services while Amazon Fresh has ventured into California with its own delivery option.

Still yet, start-up companies such as DoorDash, WeDeliver and Luna are looking to become niche players in the ever expanding delivery space as well.

Through the use of its logistics software, DoorDash specializes in local deliveries and are starting with restaurant food delivery. WeDeliver offers same day delivery for small-to-medium sized businesses while Luna is an evening delivery service, delivering to consumers 7:00 pm to midnight Sunday through Friday.

While many of the above examples focus on domestic markets, cross-border solutions are becoming a growing interest. Cross-border delivery can present challenges such as taxes, import duties and other customs fees and as a result, can prove prohibitive and difficult to maneuver for ecommerce providers as well as consumers.

Start-up firm, BoxC plans to take advantage of this growing need for cross-border solutions by offering shipping and returns between the US and China. The company provides 3-5 international shipping and also provides merchants with a US based 'Ships From' as well as 'Return To' address. The goal of the company is to eventually expand to other countries.

Now that 2014 has arrived, what can we expect in ecommerce logistics? Some industry experts have declared 2014 as the year of warehousing. Perhaps, as there are some start-up companies that provide interesting solutions for this market. For example, DropShip, which actually has been around since 2012, provides a cloud-based platform that allows retailers, brands, 3PLs and distributors to monitor, manage and grow their drop shipping operations. Another example is that of Shipwire, which recently was acquired by Ingram Micro. Shipwire provides outsourced order fulfillment services from a network of global warehouses connected by a cloud-based software platform.

But what may attract many venture capitalists’ attention this year may be apps. Businesses are adopting tablets and smartphones at a face clip. In fact, according to Google’s Executive Chairman Eric Schmidt, the paradigm shift is hastening the demise of the traditional enterprise software sales model pioneered by companies such as Oracle. Research company, IDC, seems to support this as it expects worldwide tablet shipments to reach 227.4 million units in 2013, up 57.7% year-over-year. The commercial segment is expected to provide 13% of tablet purchases increasing from 10% in 2012, and is forecasted to account for 20% of tablet sales in 2017.

One possible logistics app could be Uber. The mobile app already connects passengers with drivers of vehicles for hire and ridesharing services and it may expand further into delivering items. In fact, Uber’s CEO has suggested that Uber will become an on-demand service for everything. For example, it has delivered ice cream and kittens and during the Christmas holiday season, the company partnered with some Home Depots to deliver Christmas trees to customers’ homes.

Thanks to cloud-based software, mobile apps are indeed on the rise. Order and inventory management app providers such as Lettuce and CashierLive appear to focus on small-to-medium size ecommerce companies and offer a host of services from not only order and inventory management but also shipping management, payments and invoicing.

The use of mobile devices has also increased in the trucking industry as well. Most fleet operators already use smartphones to monitor their fleets remotely. Additional applications are being added and utilized such as track & trace/route planning, driver behavior and fuel management solutions to run on consumer-grade smartphone and tablet devices.

As observed by Google’s Executive Chairman, the increasing use of mobile devices will disrupt traditional software sales. But not only will disruptions be experienced in traditional software but quite likely also within services typically offered by logistics providers such as DHL, CEVA, Kuehne + Nagel and Panalpina. How each adapts to such changes will determine its success in the changing business environment.


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