Logistics are the foundation for e-commerce success and we’ve got a news roundup to keep you up-to-date on the latest innovations. A PwC/JDA Software report says only 10% of retail CEOs say they are profitable fulfilling omnichannel demand. Industrial real estate vacancy is at 5.6% driven mainly by e-commerce which accounts for 22.5% of big-box sales according to JLL. Dr. Michael Hanke, managing director of SkaiBlu logistics consultants, says e-commerce is reshaping the air cargo business.
In Poland, Amazon has invested $737 million into its logistics operation since 2014 and has 7500 contract employees serving Poland, Germany and EU. FedEx Fulfillment, its service for online merchants, provides warehousing, fulfillment, packaging, transportation, reverse logistics, and a web platform that offers an alternative to Amazon fulfillment services.
DHL eCommerce is expanding its e-commerce order fulfillment service available for merchants in North America with new fulfillment centers in Columbus and Riverside. DHL said e-commerce grew by 15.6% in the US in 2016. In the UK, colorful red Pelipod boxes offer a secure home delivery container and service for consumers at reasonable rates.
Bringg, a logistics management startup, raised $10 million to expand logistics services to small and medium-sized business. Amazon is now offering Chinese customers air cargo service and will compete head-to-head with Alibaba. In42.com looks at the logistics challenges in the massive Indian market and offers up potential solutions.
Logistics costs hinder omnichannel services
Despite delivering important benefits, like higher sales, omnichannel services are proving challenging for retailers because of costs related to logistics and returns.
Omnichannel services that merge online and offline operations are becoming more popular with retailers trying to increase online sales, while also keeping their brick-and-mortar locations relevant. For example, 51% of the CEOs surveyed said their company plans to allow customers to buy online and pick up in-store in 2017, up from 47% last year. Omnichannel shoppers who engage with retailers through online and offline channels spend 4% more, on average, every time they visit a brick-and-mortar store, and spend 10% more when shopping online, according to a Harvard Business Review survey. Via businessinsider.com
Growth in E-commerce Drives Strong Industrial Market Performance
Industrial vacancy is at an all-time low, declining by 70 basis points from a year ago to an aggregate nationwide vacancy of 5.6 percent in the fourth quarter of 2016, according to the year-end industrial market report from real estate services firm JLL. JLL researcher Aaron Ahlburn says that the former record low vacancy was in 2000, when the rate dipped to a 7.0-8.0 percent range as a result of market expansion coming out of the dot.com bubble.
“There are few prime opportunities for tenants now, with 64 million square feet absorbed in the fourth quarter alone,” he says, noting that e-commerce fulfillment is the strongest dynamic driving industrial demand today. E-commerce accounts for 22.5 percent of all big-box transactions, compared with 3PLs (third-party logistics), at 15.2 percent, consumer non-durables, at 12.1 percent, and traditional retail, at 10.4 percent. From 2010 to 2014, e-commerce was in third place nationally, accounting for just 16.1 percent of big-box activity.
Increasing competition for industrial space has caused rental rates to hit record highs, breaking the $5 per sq. ft. triple-net barrier for the first time, Ahlburn notes, and has set off a building boom. New deliveries nationwide in 2016 totaled 224.5 million sq. ft., compared to the previous record high of 199.2 million sq. ft. in 2008. Via nreionline.com
Air cargo transformation is taking off due to e-commerce
Dr. Michael Hanke, founder and managing director of SkaiBlu, an e-commerce consultancy assisting clients in the aviation industry, tells Logistics Management that ecommerce has transformed the air cargo business from being supply chain focused to be much more “customer centric.”
He says that from a customer’s perspective, with e-commerce, “convenience”, “control”, and “cost” (the so-called three “Cs”) assume a crucial role: Today, customers determine the hours of operation (they log on whenever they want, thus a company always has to be “on”), customers increasingly want to serve themselves (think of a retailer checking the status of their shipments via e-tracking or reserving shipping space through an air cargo business website ), and companies’ e-commerce services need to be delivered at the customer’s location (be it an office desktop, a mobile device, or wearable computing).
Hanke, author of “Airline E-commerce: Log on.Take off,” notes that at the same time, e-commerce has made market places more transparent (and thus more competitive). “Customers have never had access to more information today and with the next best website only one mouse click away, suppliers in the air cargo value chain need to be more than ever mindful of their price levels and quality of service,” he adds. Via logisticsmgmt.com
Amazon Tracker: Come Out Swinging
This week, that expansion takes us to Poland, where Amazon announced it would open its fifth logistics center this year. “Amazon has confirmed today that, in the fourth quarter, it will open a new logistics eCommerce center in Sosnowiec,” the company said in a statement on Monday.
Amazon currently employs over 7,000 people on regular job contracts in three logistics centers in western Poland near the border with Germany, Amazon’s second-largest market after the U.S., said Reuters. Amazon reportedly said it had created more than 2,500 jobs in Poland last year and invested more than 3 billion zlotys ($737 million) in the country since 2014.
As Amazon continues to invest in its global logistics capabilities, the company also recently made a move that could cut deeper into its already fast-growing shipping losses. Walmart dropped its free two-day shipping threshold down from $50 to $35 at the end of January. Just recently, Amazon did the same. The online retail giant lowered its minimum free shipping minimum to $35 down from $49 for all customers — not just Prime members. Via pymnts.com
FedEx to Challenge Amazon for Ecommerce Fulfillment
Now one major company, which is otherwise an Amazon partner, is challenging the online behemoth in one of its key specialties — fulfillment. In February, FedEx launched FedEx Fulfillment, a service for small and medium-sized online merchants. It will serve brick-and-mortar retail stores, ecommerce merchant websites, and sellers on online marketplaces.
The new FedEx service is part of FedEx Supply Chain, a subsidiary of FedEx Corporation, and is designed to be a competitor to Fulfillment by Amazon. FedEx Supply Chain came about as a result of FedEx’s acquisition of GENCO, a third-party logistics firm in 2015. FedEx boasts that it has “one of the industry’s latest same-day fulfillment cut-off times, two-day ground shipping to the majority of the U.S. population, and the capabilities for a hassle-free returns process.”
FedEx Fulfillment provides warehousing, fulfillment, packaging, transportation, and reverse logistics, with a web platform that integrates multiple selling channels and manages inventory. The company claims that with its platform, customers will have complete visibility into their products, giving them an easy way to track items, manage inventory, and analyze customer trends. Via practicalecommerce.com
DHL eCommerce Expands E-Commerce Fulfillment Solution in the US
DHL eCommerce, a division of the world’s leading logistics company Deutsche Post DHL Group, announced the expansion of its e-commerce order fulfillment service available for merchants in North America with the expansion of its fulfillment centers in Columbus and Riverside. As a result of growing demand, both existing U.S. facilities have recently significantly increased capacity with investments in storage and mechanization to support the growing needs from U.S. e-commerce players.
“The e-commerce market in the U.S. is estimated to have grown by 15.6% in 2016 with sales topping $531 billion, and increasingly e-tailers are seeking fulfillment solutions to enable an omni-channel experience for end consumers,” said Lee Spratt, CEO DHL eCommerce Americas, “We see a huge demand from U.S. e-commerce players needing best-in-class e-commerce logistics solutions and we’re expanding our capabilities to support these growing demands. Besides doubling our existing U.S. fulfillment centers in Columbus and Riverside and enhancing them with greater automation, we also plan to add an additional center in New Jersey.”
The U.S. expansion is in line with the DHL eCommerce July 2016 announcement of a $137 million investment to expand infrastructure and capabilities to expand the company’s leading role in e-commerce logistics and to serve U.S. customers with the best solutions amidst the booming e-commerce industry. Via finance.yahoo.com
Pelipod Boxes Clever with UK Rollout
Pelipod has launched its connected home-delivery box in the UK. The durable box is secured outside a customer’s house to prevent theft. Equipped with a 2G SIM card, it automatically emails the home-owner when a parcel has been delivered or a return collected.
A unique parcel code is generated for each order by the user, who then inserts this code into the delivery address. The Pelipod is sent this code so the courier can key it in to open the pod. As each parcel code is unique, the Pelipod knows exactly which parcel has been delivered. The Pelipod is always locked until accessed with the unique parcel codes, allowing for multiple deliveries or collections.
Pelipod tracks all deliveries and collections and a camera in the inside lid of the box provides photographic evidence of a parcel having been delivered or collected. Pelipod is offering the units on a free 2-month trial, after which they cost £9.99 a month, with a £15 delivery charge to addresses in England and Wales. Via mobilemarketingmagazine.com
Bringg raises $10 million to help retailers streamline delivery
The firm works to simplify delivery efforts for its clients, particularly in the last-mile, through a dashboard product that integrates with existing platforms via application programming interface (API) and software development kit (SDK) solutions. It hopes to use the new funding to grow marketing and sales, expand into new markets, and invest in research and development, according to Retail Dive.
Bringg could fill a much-needed hole in the market if it can scale effectively. Logistics is expensive for retailers, but consumers demand inexpensive and fast delivery offerings. This means that effective and advanced delivery services are all but mandatory for any company selling online, especially because good or bad delivery can impact brand perception. Via businessinsider.com
Amazon offers air cargo service to Chinese customers
Amazon is once again extending its reach as a freight forwarder, only this time it is flying directly into its main competitor’s turf. Amazon’s move to equip Chinese vendors with air cargo services shows the company’s drive to become a global freight forwarder, rather than just an e-commerce giant. Natural comparisons emerge, then, between its own expansion model and its Chinese rival, Alibaba, who has continued to expand its own reach into U.S. markets.
However, the two work in vastly different ways. Alibaba’s interest is in developing a horizontal supply chain ecosystem where companies are able to find each other to create business partnerships. Amazon by contrast is aggressively vertical, as shown by its latest overseas air cargo endeavor.
In fact, in theory Alibaba could allow its customers to choose Amazon as a logistics provider. If Alibaba seeks to provide service rather than control the logistics chain, it would not be a far step. The company recently partnered with Maersk Line, for Via supplychaindive.com
Indian Logistics Industry: Current Scenario And Future Outlook
An essential challenge faced by the industry today is the insufficient integration of transport networks, information technology, and warehousing & distribution facilities. Regulations exist at a number of different tiers, is imposed by national, regional and local authorities. However, the regulations differ from city to city, hindering the creation of national networks.
Trained staff is essential both for the third-party logistics sector as well as the manufacturing and retailing sectors, which is very weak at a practical level, i.e., IT, driving and warehouse as well as at a higher strategic level. The disorganised nature of the logistics sector in India, its perception as a manpower-heavy industry and lack of adequate training institutions has led to a shortfall in skilled management and client service personnel. There is a lack of IT standard, equipment and poor systems integration.
Poor facilities and management are the reason for high levels of loss, damage and deterioration of stock, mainly in the perishables sector. Part of the problem is insufficient specialist equipment, i.e. proper refrigerated storage and containers, but it is also partly down to lack of training. The practitioners and the academicians are now aware of the importance of logistics and supply chain; however the field is still under-penetrated as far as research is concerned. It is essential to prioritize research and development so that the weaknesses in the industry can be taken care of and improved. Via inc42.com