Outsourcing logistics: a look at the trends and what they could mean for e-commerce
Why more businesses are outsourcing their logistics
For companies that sell products online, the efficient
management of logistics services and warehouse flows is a fundamental
competitive marker that has a direct impact on business costs and an indirect
impact on customer satisfaction.
Offering quality items at a good price is no longer enough in
a market where competition is increasingly diversified and strong. A
personalised shopping experience with plenty of options on delivery times and
methods is now key when it comes to attracting new online customers and
retaining existing ones.
But not all e-commerce operations, especially in the start-up
phase, have established structures and enough staff to cope with the demands of
such a dynamic market. This is why using third-party logistics is often the
best way to satisfy an ever more demanding clientele.
What is outsourced (or third party) logistics? Put simply,
it means outsourcing the managing of your warehousing, transport and delivery
services to an external partner who specialises in this field.
There’s a growing trend in both large and smaller e-commerce
companies choosing this route - +11% in 2022, according to the latest European
E-Commerce Report. It’s also a major factor influencing the decision of
traditional companies to switch to a digital model, whether managed internally
or fully outsourced, so that they can optimise the production chain and cope
with peaks and troughs in demand.
· Outsourced
logistics will go from a turnover of 67.2 billion euros in 2019 to over 78
billion euros by 2025.
· 65% of people
who buy products online only complete the transaction after checking the
shipping offer.
The advantages of third-party
logistics
According to data recently
published by Statista, outsourced logistics is the ideal solution for SMEs,
e-commerce companies and start-ups, and will continue to grow in the coming
years, going from a turnover of 67.2 billion euros in 2019 to over 78 billion
euros by 2025. This highlights the need for companies to find trusted players
capable of offering specialist services. But what are the advantages?
Cost reduction: If the entire supply
chain is to be managed in-house, from the storage of goods to the delivery of
the product, huge investments are required in terms of infrastructure and
buildings, software for warehouse and shipping management (WMS), as well as
staffing and training. Since this is a significant commitment that is not
sustainable by all companies, especially during the start-up phase, third-party
logistics services can provide an excellent solution. Entrusting warehouse
management, shipments and delivery to partners with the necessary
infrastructure, resources and reach allows you to access scalable support to
ensure customer needs are met.
Optimal warehouse management: One
of the most delicate aspects of owning an online shop is the management of
stock, returns and the increased space needed for the storage of goods during
periods of peak demand. Using a third-party warehouse allows you to respond
promptly to market needs, streamline storage and shipping processes and thus
optimise space and scheduling.
Service improvement: According
to research conducted in the US by the National Retail Federation, 65% of
people who buy products online only complete the transaction after checking the
shipping services offered. This shows how strongly shipping influences buying
decisions: shipping times, returns policies and customised packaging are just
some of the aspects that can influence the purchasing process.
Using the right tools and technology also impacts company
productivity. That’s why software that can update you on stock and order
processing status in real time is crucial. Using a specialist partner allows
you immediate access to the latest IT solutions that integrate logistics and
warehouse management processes to offer customers accurate, real-time
information on their orders.
Outsourced logistics trends
While third-party logistics offers efficiency and the
optimisation of resources, it also allows small businesses to stay up to date
with the latest logistics strategies, opening the door to new ways of managing
their deliveries and exploiting industry trends, including:
Growth of automated processes: One
of the key trends in third-party logistics, automated procedures keep the
manufacturing process under control. Artificial Intelligence and software that
can integrate inventories in the warehouse with shipment tracking information
can significantly increase the efficiency of the production process.
Sustainability: Consumers’ growing
awareness and interest in environmental issues and sustainability means the use
of ecological packaging materials is becoming a strong factor in the choice of
logistics service providers. This trend cannot be ignored, and it’s encouraging
more companies to optimise their processes.
Focus on customer experience:
Users are becoming more and more demanding when it comes to quality of service,
driving companies to devote ever greater attention to customer experience. The
tracking of shipments in real time, customised delivery options, rapid and
punctual assistance, and a choice of delivery and collection times are now
essential differentiators in a highly competitive market.
For smaller companies, e-commerce businesses and start-ups, it’s
not easy to find solutions that can provide efficient and timely responses to
customer demands, while keeping up with the trends in an ever-evolving market.
Mail Boxes Etc. is the ideal partner for customised logistics solutions that
meet your business needs, with flexible, automated processes – from simple
shipping to professional packing and from warehouse storage to document
printing. Contact your local MBE centre to find out more about how our
professional solutions can be tailored to your precise needs.
Discover MBE e-Commerce solutions here