Logistics is moving increasingly toward a completely digital, connected and agile supply chain designed with an eCommerce-first model in mind.
This means more money, time and attention will be devoted to both moving packages out of the distribution warehouse faster and making last mile delivery more efficient. Small package volumes rose three percent in early 2017, according to the 28th Annual State of Logistics report and they only forecast more growth.
Is your eCommerce warehouse keeping up with the state of modern logistics?
eCommerce Growth Puts More Strain on the Supply Chain
Growth in those small parcels is predicted to put some major strain on the supply chain, as they outpace the available truck space to move them.
In 2015, B2C parcels were worth about $36.9 billion, but by 2019, these revenues are forecasted to grow to $48.8 billion as the eCommerce frenzy continues to snowball. Shippers have taken note of these changes and are charging accordingly, announcing rate increases of up to five percent on popular shipping services.
That means you’ve got to be faster, smarter and more flexible than ever! Here are some ways to stay ahead of rising shipping costs:
- Choose regional distribution centers. It’s convenient to have your distribution warehouse right next to your business, but it’s not always the best idea when it comes to shipping.Having centrally located warehouses means it costs less to ship your packages because your shippers don’t travel as far, plus they can deliver your parcels faster in many cases. A single central warehouse can work if it’s well-located, or several regional centers serving your customers will help cut those logistics costs.
- Negotiate for route configuration changes. Just because UPS or FedEx thinks a particular route makes sense, it may be more costly for your parcel. It might be smarter to get that box onto a different route, one that’s more direct or perhaps travels along faster highways or through more predictable terrain in poor weather.If you’re using a smart 3PL, they’re probably already doing this for you, but it never hurts to check.
- Arrange alternative last-mile carriers. Both UPS and FedEx have made deals with the USPS to hand off last-mile packages at the request of the shipper, but you can also arrange for other last-mile shippers if you’re providing white glove service, for example. Your last-mile is going to be a huge part of your shipping expense, so it does pay to shop around.
eCommerce logistics are changing rapidly right now, but that doesn’t mean that you can’t maintain your margins and keep your warehouse running efficiently. An agile warehouse and supply chain is a profitable one, yours just needs to think a little bigger to stay ahead of the waves that are surging.