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How e-commerce is changing the transport industry

The boom in online retail is changing logistics structures

E-commerce has been growing steadily for a long time. More and more retail customers now have their purchases delivered straight to their doorsteps. This has consequences for logistics service providers: They have to familiarise themselves with the B2C business. For help, they can turn to mobile apps that manage their drivers and processes.

Bevh, a German association for e-commerce and mail order companies, recently analysed e-commerce trends during the COVID-19 pandemic. German sales declined in March but then reached EUR 6.82 billion in April, a year-on-year increase of 17.9 per cent. This suggests that e-commerce has proven to be a reliable distribution channel and key component of modern retailing. It is changing how logistics processes are managed. Customer satisfaction now demands that orders be filled quickly and transparently. The first glimmerings of a high-tech future have started to emerge: drones, autonomous lorries or smart online stores. But these innovations are still far from being a widespread user reality. That is why logistics service providers remain focused on optimising conventional processes through digitalisation. From the warehouse to the loading dock to the driver on the road.

This raises the following questions:

  • What is our starting point, and what is the challenge?
  • What special requirements do logistics companies face?
  • What solutions are needed?
Starting point

E-commerce requires transparent logistics processes

If you order a product today, you usually expect it to be delivered the next day, preferably with free shipping. That sounds like a simple logistics process.   If an item fails to live up to expectations, the consumer simply returns it through an online process using the same shipping method that it arrived on. However, clicking the order button kicks off many different processes that interlock like gears. These processes are what powers a seemingly simple activity such as delivering an item from A to B. And e-commerce, with its high volumes of small simultaneous shipments and need for speed, straightforward processing and transparent documentation, needs every link in the chain to work together seamlessly. Volumes per delivery are declining even as the number of stops per trip is increasing. While lorries used to leave warehouses with full pallets, they now regularly carry half-pallets and packages. One thing is clear: The faster, more transparent and more efficient the processes are, the easier it is to extract profit from them. A customized transport management system (TMS) can cut costs by five to ten per cent. Another consideration: Retail customers only (want to) see the functioning machine. This requires extensive transparency and collaboration among supply chain participants, from the retailer to the shipper to the freight forwarder.

Challenge

Digitalising coordination

Freight forwarders handling deliveries down to the last mile play a pivotal role in the supply chain. If the customer is satisfied because the delivery was quick, flexible and well-coordinated, that means the logistics provider has done a good job. However, what does a logistics provider need in order to establish transparent, quick, agile and ultimately more cost-efficient processes? That kind of goal calls for processes to be digitally mapped, all stakeholders to be involved in these processes, information to be exchanged down the process chain, and data to be analysed in great detail. All in real time. To do that, people must first realise that they would rather put paper through a shredder than send it on a trip with a driver. Digitalisation should ideally reach everyone in the supply chain who is jointly involved in managing the processes through tools, platforms and networks.

Conclusion

Apps make logistics processes agile

Logistics service providers ultimately benefit from a fully digitalised, paperless process that features easy communication and transparent documentation. Their whole goal should be to simplify workflows. One way to do this is to have an app walk drivers through their tasks: from loading the goods to making the trip to unloading at the customer’s location or the retail customer’s home. That way, drivers can do exactly what needs to be done, one step at a time. This slashes the error rate. Another option is for dispatchers to manage a trip so precisely that drivers can avoid main roads during rush hour and steer clear of traffic jams. If things still go awry, the system allows the driver to notify the buyer of the delay with a single tap in the app. This kind of intuitive handling on a smartphone, tablet or laptop is what allows us to jettison paper-based forms. And it is the basis for replacing complicated IT training sessions with intuitive task-based learning. With tools like these, employees are equipped for the workflows they need for their regular jobs. And there is no need to overload them with superfluous information. It is also important to integrate your workflows into your partners’ or customers’ production systems. One thing is certain, after all: Managing one process alone may work. However, whenever different workflows from different providers come together and involve different tasks for different stakeholders, process complexity tends to grow exponentially. In those cases, wouldn't it be nice to have one app to handle everything?

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