The Sweeping Effect of E-commerce

I’m going to go out on a limb and say that the continued double-digit growth of e-commerce is forcing the hand of nearly every logistics and supply chain professional to re-adjust their day-to-day operations at some level.

By ·

In fact, the impact of digital commerce and the subsequent challenge of omni-channel fulfillment cuts across every manufacturing and distribution market—and it’s putting increased pressure on all the major modes of transportation and the distribution center (DC) operations that keep well-managed supply chains fluid.

This month, the editorial staff of Logistics Management has developed several features to help put the sweeping effect of e-commerce into perspective. To lead things off (page 20), executive editor Patrick Burnson not only considers the more traditional “modal heavyweights” and their evolving role, but also looks at the domino effect e-commerce is having on commercial real estate in some of the geographic hotbeds of distribution.

“While most of the attention has been paid to the changes in parcel express management,” says Burnson, “it’s imperative to examine the mounting pressures being felt by the air, ocean and intermodal operations that are working to connect the expanding warehouse and DC network being built to support this explosive growth.”

As Burnson reports, the development of a sprawling network of “massive” facilities has been nothing less than revolutionary for commercial real estate development. Not only is it a bit of a “boom,” but all this new building is forcing the creation of fresh infrastructure in and out of these facilities in order for them to be effective.

“E-commerce has been the catalyst for 117 U.S. facilities spanning 1 million square feet or more over the past six years,” says Burnson. “And there are now 29 under construction across the 10 busiest markets in the U.S., all neatly tied to road, rail, air, and sea access that shippers need to make e-fulfillment work. When you add up the benefits, it’s truly extraordinary.”

Of course, no comprehensive look at the broad effects of e-commerce would be complete without a snapshot of the parcel express market—and group news editor Jeff Berman doesn’t disappoint. Starting on page 26, Berman gathers three top market analysts to offer parcel shippers a deep dive on pricing, volumes, services levels as well as fresh insight into how far Amazon has come in developing its own logistics network.

“It’s no surprise that e-commerce is driving volumes and earnings,” says Berman. “At the same time, shippers should be happy to see that service levels are on their way to hit record levels. Of course, shippers are going to pay more for these services, so it’s critical for them to better understand their freight and options.”

And while the transportation management adjustments are apparent outside the four walls, our “Annual Warehouse and DC Equipment Survey” reveals that the pressures of e-commerce fulfillment being felt inside are now fueling equipment and technology investment levels. Contributing editor Roberto Michel neatly puts the results of our annual study into context starting on page 46.

“The findings couldn’t be clearer,” says Michel. “Spending is up, quite noticeably in IT, while 54% of respondents told us they expect to be spending more on materials handling systems and related technology over the next two years—and all aimed to help overcome e-commerce pressures.” 


Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

E-commerce · All Topics
Latest Whitepaper
Identify Cost Savings with Real-Time Visibility
To offset the impact of late shipments, unreported delays and detention, shippers are increasingly requiring 100 percent visibility into the location and status of their freight.
Download Today!
From the August 2017 Logistics Management Magazine Issue
Which carriers, third-party logistics providers, and North American ports have crossed the service excellence finish line ahead of their competitors? Our readers have cast their votes, and now it’s time to introduce this year’s winners of the coveted Quest for Quality Awards.
BMW Takes the Inland Road to Efficiency
Global Logistics: No Shortcuts to Security
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...