In today’s digital age, the eCommerce revolution has not only transformed how we shop but also left an indelible mark on the logistics landscape. In this blog post, we’ll explore how the 3PL (Third-Party Logistics) industry, particularly, experienced a seismic shift, adapting and thriving in response to the ever-expanding eCommerce ecosystem.
The eCommerce landscape has experienced remarkable expansion in recent years, largely propelled by the integration of various technologies. This trend is expected to impact favorably the global Third-party Logistics (3PL) market size. Particularly over the past five years, the online retail industry has undergone a transformative evolution, distinct from any other industry. Enhanced infrastructure, heightened awareness, technology-driven logistics platforms, and enticing online shopping incentives have all played pivotal roles in fostering growth within eCommerce and logistics domains. The surge in online shopping over recent years has been substantial, and this upward trajectory shows no signs of abating.
Thus, it is unsurprising that global retail eCommerce sales are projected to reach $8.148 trillion by 2026.
The Amazon Influence
Amazon has an unmistakable influence on the market. The eCommerce giant is undoubtedly the driving force for eCommerce and omnichannel marketing. Any action Amazon takes creates reverberations that resonate throughout the entire retail landscape.
One of Amazon’s most significant contributions is its accessibility of swift and often cost-free shipping options. With its extensive network of warehouses nationwide and cutting-edge algorithms that anticipate customer preferences even before they sign in, Amazon maintains its dominant position in the industry.
Most retail and eCommerce brands are realigning their business strategies to thrive in the market. Factors such as last-mile delivery and just-in-time delivery (JIT) represent critical elements that can significantly impact a company’s performance in the e-commerce realm. The continuous enhancement of warehouse and supply chain technologies is consistently refining the shipping process, resulting in a more efficient end-to-end operation.
As eCommerce gains greater acceptance among consumers, Third-Party Logistics (3PL) companies are obliged to provide services at par with those offered by Amazon to meet their customers’ evolving expectations.
The COVID-19 Disruption
The unforeseen disruptions in the global economy, including online retail and eCommerce, caused by an unfamiliar virus were beyond anyone’s anticipation.
Government-mandated closures and directives to stay-at-home promptly compelled consumers to alter their shopping habits. While essential outlets like grocery stores, pharmacies, and large retailers remained operational, non-essential enterprises had no choice but to suspend operations. Numerous companies transitioned their workforce to remote work arrangements to respond to the crisis.
During such widespread restrictions, consumers confined to their homes were compelled to increase their online shopping activities. There has been a notable surge in the sales of various products, comprising groceries, essential household items, dry goods, exercise equipment, books, toys, movies, and games, as individuals stuck at home diligently secure their necessities.
Market research firm Rakuten Intelligence reported a remarkable increase of over 30% in eCommerce spending from the beginning of March through mid-April 2020 compared to the previous year.
Impact on Logistics Sector
The upsurge of eCommerce is a well-established trend, yet the pandemic has undeniably accelerated its growth. This rising eCommerce sector directly impacts companies engaged in logistics, warehousing, and supply chain management. To ensure precise and timely order fulfillment, online retailers are increasingly turning to outsourced logistics solutions.
In the current landscape, customers expect fast deliveries and seamless and convenient return processes. In today’s fiercely competitive eCommerce arena, you must take a proactive and responsive approach to meet these expectations. Numerous reports highlight that maintaining a flawless supply chain represents the most significant hurdle for retailers. The solution to achieving a flawless supply chain is implementing a logistics platform infused with AI, ML, and other cutting-edge technologies.
Adoption of Technology
Technological innovation has permeated every facet of our existence. The outbreak of the pandemic not only hastened the evolution of the eCommerce industry and influenced consumer behaviors. Logistics service providers made concerted efforts to enhance their technological capabilities, enabling them to cater to the delivery requirements of online businesses while maintaining competitive pricing.
Retail and eCommerce businesses initiated the integration of cutting-edge technology into their platform functionalities to optimize the management of online business supply chains. This trend of integrating advanced solutions in operations included a spectrum of technologies, including artificial intelligence, machine learning, the Internet of Things, and automation. Such advancement of technologies enables functions such as comparing shipping rates from multiple carriers on a unified platform, facilitating cloud-based order confirmations, enabling real-time tracking, and selecting the most cost-effective carrier partner based on various metrics.
Logistics partners must consistently introduce solutions that prioritize agility, flexibility, ease of use, and competitive pricing to thrive and maintain profitability in the market. Embracing technological advancements is also instrumental for you to expand successfully and meet the constantly evolving demands of consumers.
Advanced Software Technologies Impacting the Adoption of 3PL
Major third-party logistics providers are investing substantially in innovative technologies, diversifying their services, and extending their global presence. Companies in the logistics sector are commonly utilizing software solutions such as cloud-based ERP and supply chain management systems. These software solutions offer numerous advantages, including real-time data access, online documentation for international shipping, effective warehouse management, and precise inventory tracking, all aimed at capturing the interest of existing and prospective manufacturers.
Leveraging advanced technology yields efficient outcomes and, consequently, substantial profits. Prominent participants in the 3PL industry readily embrace advanced technologies in areas such as transportation management, distribution center operations, supply chain management, and data analytics.
Conclusion:
Thus, to sum up, partnering with professional 3PL services becomes essential for you to thrive in the marketplace and achieve customer satisfaction. 3PL companies lessen the burden and let retail and eCommerce brands concentrate on their core competencies, driving efficiency and supporting more profitable operations. Leveraging organized and streamlined supply chain operations makes 3PL companies the backbone of online shopping.
About XPDEL:
XPDEL is a leading hi-tech provider of Fulfillment and Logistics Services on a mission to enable growth for eCommerce companies. We are futuristic in our vision and constantly work on creating technology that helps us meet customer expectations for today and tomorrow. We have a wide network of Fulfillment centers that enables us to efficiently handle nationwide delivery in the US – same day, next day, and 2-day delivery. Being closer to the end consumer, we deliver much faster than others.
