Companies representing practically every industry are beginning to rely on online sales to boost revenue. Through social media and mobile marketing campaigns, customers are being driven to websites and membership clubs for savings and purchases. Supply chains are pressured to meet these demands without compromising value to companies and their consumers.
This growth in e-commerce activity creates new demands on freight management systems that must delivery volumes of merchandise each day. The wait is over for a five business day delay in receiving goods ordered online. Many consumers are looking for next-day delivery options to satisfy their microwave desires. More often than not, companies are now turning to logistics to help with improving customer satisfaction.
Freight services provide an effective way for companies to maintain large volumes of goods at e-commerce distribution centers. Essentially, these carriers use shipping strategies that help to boost capacity and keep expenses down. These savings can give companies multiple shipping options on their websites to meet consumer demand and expectations.
Online shopping is changing the landscape of the freight services industry. Over one-third of shipping and warehousing demands in the United States during 2012 was generated by online retailers. The e-commerce business is growing faster than conventional brick-and-mortar business. As the buying habits of consumers change, so goes the retail industry.
More companies are realizing the significance of having a web presence that allows consumers to have shopping at their fingertips. More online marketing campaigns are sprouting up and business models are changing to keep e-commerce websites in the center of all sales.
As the e-commerce sector is expected to reach an annual growth rate of 11.5 percent and m-commerce projection is 48 percent, freight services are gearing up to meet the demand. According to the American Trucking Associations, freight volume is expected to increase 22 percent by 2022.
This will generate an additional 66 percent in revenues for the trucking freight industry alone. Imagine what the numbers will be for other modes of transportation. But for now, trucking is expected to dominate freight shipping in revenue and freight volume.
Building an online store costs much less than construction in a business district or new shopping mall. This opens the door for many new merchants who want to capitalize on the e-commerce business bandwagon. These types of retailers do not require expansive warehousing of goods. Instead, their business flourishes with rack systems and other forms of storage that costs less to maintain.
While industry experts expect freight movement for trucking services to increase in the U.S., logistics companies are also making plans for expansion. The business model for freight services is also changing for the level of business e-commerce is poised to bring.
E-commerce fulfillment services offered by freight companies give online merchants of all sizes end-to-end solutions from the warehouse to the consumer’s house. The desire for efficient and effective fulfillment processes helps companies keep a competitive edge on customer orders.
Some fulfillment services can handle the entire product flow so companies only worry about selling the product. Delivery is the primary concern for freight services that specialize in e-commerce shipments. Fulfilling orders is left to the freight service charged with meeting delivery demands. For online merchants, these services provide cost efficiencies, scalability and peace of mind.
Freight services may vary depending on the company, but in addition to pickup and delivery services most offer:
There are a range of shipping options that companies can use to guarantee delivery. Typically, truckload services are suitable for large quantity shipments. Occasionally, less-than-truckload shipments are also cost-effective. Frequent deliveries can go to smaller freight carriers. With either method, companies can make sure their inventory levels are sufficient to meet demand.
Customers have more flexibility when they have multiple delivery options. Chances that a transaction is completed sometimes depends on the type of shipment a customer can choose. While this is optimal for the customer who is looking at budgets and schedules, this can place additional demands on a freight services company to fulfill the orders. The online merchant’s role is to have sufficient inventories to facilitate the delivery options.
This is where diverse delivery models can help online merchants. Fortunately, there are different options available when use of carriers outside the standard is required. For instance, areas that have P.O. Boxes or APO/FPO/FPO may require an alternative to the delivery services commonly used for regular addresses.
Shipping regulations prohibit commercial delivery services to deliver to Armed Forces stations and P.O. Boxes. Only the United States Postal Service is allowed to make these deliveries. Using outpost services will add significant transit times because of possible barging to reach the final destination. This is especially true for offshore locations like Hawaii or Alaska.
Comparing options requires merchants to do a detailed comparison of the costs and services. In most cases, regional carriers offer heavy discounts and do not have accessorial charges. These same carriers might use a dimensional factor to calculate rates, which can also help online merchants save.
Equally important to cost is the type of service merchants can expect. Their reputation depends on meeting customer expectations with on time delivery of orders. Good carriers, whether regional or otherwise, will make sure their shipping solutions will maximize service. A hybrid offshore option should not change this dynamic. Online merchants need freight carriers that can meet e-commerce transit times consistently.
According to some industry executives, many major online retailers are experimenting with e-commerce strategies that might put a dent in package delivery services.
For example, Amazon has built a distribution warehouse that will save millions in shipping costs. The company is also using its own delivery trucks instead of the traditional delivery companies like FedEx and UPS for some fulfillment orders. Brick-and-mortar stores such as Best Buy, Inc. and Gap, Inc. are shipping orders from stores that are close to consumers, rather than using warehouses located in another state.
To be sure, FedEx and UPS are watching these changes since large retailers are some of their biggest customers for filling trucks and airplanes.
Most consumers want fast delivery options while shopping online. Most online merchants guarantee delivery via next-day or within 24 hours if goods are being shipped within the country. Foreign shipments will take longer with an average delivery time of 15 days. To meet both the expectation of consumers and demand of online merchants, freight carriers must provide services that delivery. Literally.
Fast, reliable services will make the difference between an online merchant having repeat customers and it becoming a one-hit wonder. Consumers appreciate choices when they place online orders including being able to pickup certain items at stores. Not only can freight services provide front door deliveries, but they can also ship products to local storefronts.
Despite a floundering economy, online shoppers are expected to spend billions of dollars. This represents a growing trend in e-commerce shopping that is not likely to disappear soon. Freight carriers are gearing up for the increased sales to meet the growing demand.
Online merchants are also gearing up with improved customer-friendly e-commerce tools and delivery options. Whether they must fill less-than-truckload or full truckload orders, connecting with the right carrier guarantees orders are delivered on time, every time. Keeping track of inventory items in warehouses also helps companies fill orders when expected.
Use of e-commerce for purchases is expected to increase across the globe as more companies are looking for ways to increase operational efficiencies. A standardized industry platform may eventually unite freight carriers with their diverse business customers and bring more transport modals into the mix.