Role of eCommerce Logistics Companies: From Website to Consumer’s Doorstep


Role of eCommerce Logistics Companies: From Website to Consumer’s Doorstep

With a predicted CAGR of 20.4%, the global eCommerce logistics market is expected to reach  $1,901.97 billion by 2030. All eCommerce companies are teaming up with reliable and trustworthy logistics partners to optimize the delivery fulfillment journey. But how do these eCommerce logistics companies work and deliver value to the customers?

Online stores can use the shipping, packaging, and delivery services offered by eCommerce logistics companies. Proper management systems, such as WMS (Warehouse Management System),  OMS (Order Management System), and TMS (Transport Management System), help streamline all the processes. Automated systems for inventory, order creation, tracking, NDRs, and returns can ensure that logistics partners make the entire delivery process transparent to not just eCommerce stores but also their customers.

Here, we discuss the eCommerce logistics companies at length, the challenges they resolve, and how they make operations management hassle-free. We will also dive deep into all the steps involved in eCommerce logistics companies’ operations for a better understanding.

What Are eCommerce Logistics Companies? 

eCommerce logistics companies provide dedicated logistics services to online stores and brands like shipping, packaging, picking, and delivery fulfillment. They help online retailers with smart fulfillment, warehousing, distribution, and logistics transportation, across the first, middle, and last mile.

These companies handle the order fulfillment process after a customer places an online order, which includes handling everything from packing, shipments, and delivery to returns and refunds. They streamline and resolve all transportation as well as warehousing-related issues. This brings in a degree of responsiveness and competence to provide suitable solutions in response to the increasing demand for logistics support.

9 Logistics Challenges eCommerce Logistics Companies Can Overcome 

On average, online retailers spend 11% of their revenue on logistics, and about 53% of retailers claim that logistics for delivery and fulfillment present “significant” difficulties. So, fast and effective logistics can be seen as a competitive advantage for eCommerce stores. 

Modern logistics companies employ intelligent solutions to provide optimized experiences despite evolving market conditions and increasing customer expectations. 

Below, we discuss the major logistics challenges eCommerce companies can overcome with smart eCommerce logistics software companies.

Offering Multiple Shipping Options

Each eCommerce company needs an order and delivery management system to diversify its shipping options. Logistics companies for eCommerce offer order management that uses AI/ML to proactively show personalized, multiple shipping options to online customers based on their location. 

It geolocates them and gathers useful information from various carriers to tailor their shopping experience. This increases the likelihood of each customer successfully completing the checkout process.

This helps eCommerce companies compile a diverse service portfolio and provide a pleasant shopping experience.

Improving Delivery Productivity

About 65% of US consumers expect to receive products they have ordered online within two to three days. Offering a no-cost delivery is also a major purchase driver and is one of the top reasons people shop online. 

Companies for eCommerce logistics come with smart automation and process management to curb delivery and logistics costs via smart asset utilization, vehicle capacity optimization, efficient driver management, and more. Hence, online retailers can offer lucrative services like free deliveries, next-day or same-day deliveries, and more. 

Enhancing Customer Satisfaction

With features like two-day delivery, same-day delivery, and free shipping, customers are increasingly expecting more from eCommerce companies. Ensuring customer satisfaction while keeping company costs down is difficult. Here order tracking has a key role. About 91% of customers actively track their orders. Any lapse here would create a negative impression of the brand.

An eCommerce logistics company offers multiple features, such as real-time order tracking, automated alerts for order movements, and reliable customer support. Smart automation features, such as multiple payment options, chat with riders and submitting Proof of Delivery (PoD), etc., also help enhance customer satisfaction. Further, flexible delivery windows, dynamic ETAs, and priority shipping elevate the overall CX and help create loyal customers.

Improving Business Profitability

Apart from the logistics transportation from warehouses to distribution centers or hubs, eCommerce companies have to find logistics partners for last mile delivery as well. Disparate systems and the inability to manage them via a unified interface leads to operational inefficiencies and higher delivery costs. Online retailers are not able to regulate the delivery costs, vehicle costs, and fleet costs without any proper integrated management.

eCommerce logistics companies, on the other hand, specialize in shipping products and have negotiated discounted shipping rates with various carriers, which can save businesses money on shipping costs. These companies also have the expertise to select the most efficient shipping methods and routes to help reduce transportation costs.

These companies also provide warehousing and inventory management services, which can help businesses save money on storage costs and reduce the risk of stockouts.

Controlling Shipping Costs

With evolving expectations, about 28% of customers avoid online purchases and abandon the carts if presented with unexpected shipping costs. But, orchestrating fast deliveries comes as an added cost for the online retailers, and as the offerings like same-day delivery become popular, the situation becomes more difficult.

eCommerce logistics companies employ advanced technologies and smart algorithms to generate highly efficient delivery routes and optimize them as per specific consignment details and delivery locations. This helps reduce the miles traveled, fuel costs, rider costs and ultimately delivery costs. 

Scaling eCommerce Logistics

The biggest hurdle in increasing online sales is meeting demand without overextending the resources. Rapid increases in online sales force many eCommerce businesses to scramble to speed up their eCommerce logistics procedures.

eCommerce brands collaborate with logistics companies that use dynamic scaling to expand or contract their eCommerce supply chain in a hassle-free manner as per the business needs. To help clients maximize their investment in e-commerce logistics, the ideal logistics company will provide strategic input on growth opportunities.

Measuring KPIs

Without proper insights into the number of orders delivered on time, rider performance assessment and other such core metrics, businesses hre unable to identify whether they are getting the best value out of their money or not. Online retailers might never have the idea how returns are slwoly killing their revenues or how last mile logistics are choking their profits. 

eCommerce logistics companies provide a centralized KPI measurement, tracking and assessment platform that makes it easier to access these metrics. Businesses can see how well different logistics partners are performing and get actionable insights related to the field and hub operations. They can measure and monitor the individual rider performance and ensure that the business stays profitable.

Managing Returns

Returns are now a common occurrence when shopping online. Online shoppers have become very comfortable clicking the “Buy Now” button and merely returning something if the product does not live up to their expectations.

30% of online shoppers over-purchase and return unwanted products, which means without a solid strategy, eCommerce stores might end up hurting their bottom lines without even realizing it. However, partnering with logistics solutions ensures that the return logistics are just as effective as their shipping logistics. They can club the returns with deliveries and leverage the warehousing facilities offered by the logistics partners in a better manner; to reduce the brunt of returns. 

Meeting Evolving Customer Expectations

For eCommerce stores to meet customer demands, it is crucial to be creative and stay on top of every stage of the logistics process. The logistics sector must keep evolving to keep up with changing customer mindsets.

Smart eCommerce logistics management utilizes different supply chain management systems for end-to-end visibility and maximizing supply chain performance as per customer demands. They can offer versatile services like delivery scheduling, rescheduling, dynamic ETAs, orchestrating highly efficient on-demand deliveries, and scaling up and down as per the order peaks. 

How Do eCommerce Logistics Companies Help Manage Logistics Operations? 

E-commerce logistics companies have access to advanced technology such as warehouse management systems, transportation management systems, and order management systems. These tools can help businesses streamline their operations, reduce errors, and improve order accuracy, which can lead to cost savings and improved profitability.

There can be instances, where one e-commerce store might only need last-mile delivery services, whereas others may require complete end-to-end logistics management. In such cases, eCommerce logistics partners can cater to diverse logistics demands.

By automating operations, the logistics management platform saves time, resources, and capital expenditure. The software also enables a wide range of additional features that streamlines the entire logistics management. 

Let’s dive deeper into the features offered by eCommerce logistics companies.

Order Processing

E-commerce logistics companies help with order processing by providing a range of services that facilitate the movement of goods from the seller to the buyer. These services include order fulfillment, inventory management, packaging, labeling, and shipping. The logistics company receives the order details from the e-commerce platform and processes the order on behalf of the seller. 

This includes picking the items from the inventory, packing them securely, and labeling them correctly for shipping. The logistics company then handles the shipping process, ensuring that the package is delivered to the buyer on time and in good condition. By outsourcing their logistics to a third-party company, e-commerce sellers can streamline their operations, save time, and focus on growing their business.

Warehousing and Inventory Management

These companies help with warehousing and inventory management by providing secure storage facilities and managing the inventory on behalf of the eCommerce seller. The logistics company receives the products from the seller and stores them in its warehouse. They use inventory management software to keep track of the products and ensure that they are always in stock. 

The seller can access this information in real-time and can manage their inventory accordingly. The logistics company also helps with order fulfillment by picking the products from the inventory and packing them for shipping. This allows eCommerce sellers to focus on their core business activities while ensuring that their products are stored and managed efficiently.

Order Dispatch

The order creation and customer billing functions both need to be accessible from one place in the supply chain for seamless management. eCommerce logistics management software helps eCommerce stores achieve this.

This software enables the creation of orders, and the charging of customers from a single integrated dashboard; this way, the work of an operational manager is significantly reduced. 

Route Planning and Optimization

Another major benefit offered by the logistics companies for eCommerce is route planning and optimization. These companies leverage smart route planning software that automatically creates highly efficient delivery routes for multiple consignments in one go. 

It helps track and predict the movements of vehicles in real-time and also helps in dynamic routing in case of traffic congestion and other road mishaps. 

Route planning and optimization helps reduce the overall delivery costs, vehicle costs, and helps in unlocking the highest resource utilization efficiency.


E-commerce logistics companies provide a range of shipping and delivery options to eCommerce seller. They use their network of carriers and transportation providers to ensure that the products are delivered to the buyer on time and in good condition. The logistics company handles all aspects of transportation, including route planning, tracking, and customs clearance. 

They also offer multiple delivery options, such as next-day delivery, same-day delivery, and international shipping. By partnering with a logistics company, e-commerce sellers can benefit from their expertise in transportation and ensure that their products are delivered to customers quickly and efficiently.

Real-Time Tracking

Advanced tracking systems allow e-commerce sellers and buyers to track the shipment in real-time. The logistics company provides a tracking number that can be used to monitor the status of the shipment throughout the entire delivery process. This includes updates on when the package is picked up, when it is in transit, and when it is delivered to the buyer. 

The tracking system is updated in real-time, providing accurate and up-to-date information on the status of the shipment. This allows the e-commerce seller and the buyer to track the package’s progress and anticipate its delivery time, ensuring a positive customer experience.

Returns Management

Up to 41% of customers purchase different products intending to return some. Return rates for brick-and-mortar stores and online retailers can range from 8% to 50%. If an eCommerce store does not collaborate with an eCommerce logistics provider with a robust return management solution, dealing with reverse logistics becomes difficult.

eCommerce logistics companies with smart functionalities help businesses automate and optimize their reverse logistics processes as well. The return pick-up tasks are also allocated in a smart manner and can be coupled with pickups. This helps reduce the overall cost of returns management. 

Choose Shipsy – A Leading eCommerce Logistics Company 

Shipsy’s AI-powered logistics management software enables eCommerce companies to orchestrate highly resource-efficient deliveries, reduce fuel and delivery costs, and enhance their logistics & supply chain operations.

The intelligent solution comes with smart route planning and optimization, effortless integrations with existing tech infrastructure such as WMS/OMS/ERP etc., 3PL management, and highly efficient last mile delivery orchestration. With centralized communication and collaboration features, brands can easily communicate with service providers and customers and also avail the real-time automated alerts/updates capabilities to help businesses unlock:

  • 64% increase in customer satisfaction
  • 18% decrease in shipment returns
  • 26% increase in delivery NPS
  • 23% reduction in last-mile delivery costs
  • 28% increase in on-time dispatch

To get started with Shipsy’s smart eCommerce logistics management platform or to know more about our offerings, please get in touch with our experts for a customized demo today!


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