Do you know that in just five years, the global parcel volume will be more than 260 billion parcels shipped? Statista reports that by 2027 the global retail eCommerce sales will be USD 8.1 trillion, and the global express logistics market will be USD 368.85 bn. While this paints a lucrative business opportunity landscape for retailers, the rapidly altering retail demands, driver shortages, capacity crunches, and the emergence of new fulfillment models are driving a wave of transformation in the industry.
The cross-border eCommerce is intensifying, and customer shopping behaviors are steering toward sustainability. The nuanced ability of a consumer to have anything at their doorstep puts tremendous pressure on retailers and logistics service providers (LSPs), forcing them to reimagine how they operate.
Here is a quick overview of the five major disruptions facing global CEP providers and their resolutions.
Fast delivery expectations from customers are driving retailers and eCommerce businesses towards an increased focus on inventory availability. This results in stringent OTIF (On-Time In-Full) delivery compliance. For instance, Walmart expects 98% OTIF adherence from logistics providers, and failure to achieve this results in penalties. As the global cross-border eCommerce gains momentum, the global CEP providers with no visibility over shipment movements, lack of predictive insights for inventory, SKUs, and market demands, and inability to manage the operations from a unified dashboard are in for massive challenges.
Investing in smart logistics automation for end-to-end transportation can help speed up the First Mile pickups, get actionable insights from multiple operations and stakeholders in the logistical ecosystem, and make informed decisions for greater OTIF adherence.
Rapidly altering retail demands and the emergence of diverse delivery models are pushing retailers to reimagine their delivery operations and orchestration. Businesses are quickly realizing that partnering with just one CEP provider is neither reasonable nor scalable.
They are looking for ways to deliver across multiple customer segments without violating the delivery SLAs and business bottom lines. While the majority of businesses are still using traditional or manual management techniques, customers have developed an affinity for over-the-top business service offerings, such as same-day delivery, real-time shipment status updates, and proactive follow-ups.
Intelligent carrier management platforms with custom carrier selection parameters and rapid onboarding capabilities are the right way forward for such retailers as they help reduce operational costs and facilitate rapid delivery scaling.
33% of customers in the US consider switching brands immediately after a single instance of poor service, and companies in the US lose more than $62 billion annually owing to poor customer service. Further, a recent survey revealed that 96% of customers feel driven toward the purchase if the delivery is free of cost. Add the global sentiment shift toward sustainability, and the retailers are currently holding a Pandora’s Box with no clue to keep it shut.
Hence, partnering with AI-powered logistics automation that helps scale deliveries by optimizing resource utilization, reducing the number of steps involved in delivery, and allowing work with multiple logistics partners is a must. Such smart solutions help orchestrate, manage, monitor, track, and control the delivery operations and logistical movements in an effortless manner. Further, businesses can create robust business strategies by implementing KPIs, measuring customer delight, and more.
Stats reveal that 50% of all eCommerce orders will be delivered from local inventory by 2023, and the emergence of quick delivery models in retail and eCommerce will only increase this percentage. Global customer behavior changed during the pandemic, and businesses tapped into the local-to-local delivery model for delivering out-of-the-box customer delight.
However, with retailers entering the segment and promising a few-hour delivery via eCommerce platforms, the CEP providers were left wondering how to manage both the planned and quick deliveries.
CEP providers must reimagine their last-mile delivery model to capitalize on this opportunity and empower retailers to champion this fulfillment model. Automation platforms that offer workflow automation and granular optimization for shrinking delivery times, scaling last-mile operations, and driving instant gratification will be critical for CEP providers.
Consumers, investors, and employees – the entire community of the supply chain ecosystem is driven towards sustainability. 85% of consumers feel that their purchase decisions can have a lasting impact on the environment, and more than one-third of global customers are ready to spend more on sustainable products.
As governments worldwide draft stringent policies around Greenhouse Gas emissions and carbon pricing, CEP providers must make logistics operations sustainable. So, reducing fuel consumption, trip volumes, and miles traveled will be necessary.
This is another excellent use case of delivery operations’ optimization via smart automation. AI-powered route planning and optimization, delivery scheduling, en route order clubbing, real-time order tracking, and automated order allocation – there are many ways automation can help reduce the miles traveled and help businesses realize their sustainability goals.
From deploying automation to geocoding, digitizing first, middle, and last-mile logistics operations is the right way ahead for CEP providers. This empowers them to track 3rd party fleets in real-time, optimize service times, reduce customer onboarding time by 45%, increase delivery NPS by 18%, enhance customer communication speed by 30%, reduce last-mile delivery costs by 23%, and more.