LM Viewpoint on E-commerce Logistics: Time to simplify

From changing distribution network strategies in an effort to meet increasing demand to rising cost of warehouse space to re-inventing carrier relationships to applying software tools designed to monitor a non-stop flow of goods, the challenges for all shippers are mounting at every stage of the supply chain—and are only going to become more intense.

In response, large carriers are adding new services and acquiring smaller, regional players to amp up last-mile delivery; 3PLs are diversifying to become omni-channel fulfillment, inventory and labor specialists; and software providers are going full-speed ahead to release any number of solutions geared toward improving visibility to increase delivery and inventory management performance.

With this overwhelming environment in mind, we’ve decided to devote the majority of this month’s issue to better understanding some of the more prevalent challenges ushered in by the “e-comm effect.”

Kicking off this collection, executive editor Patrick Burnson has put together a panel of thought leaders from the academic, association and consultancy worlds to offer a broad view of the current e-commerce logistics landscape. The goal, says Burnson, is to simplify the most pressing logistics management challenges and offer some practical advice amid the noise.

“If there’s one key takeaway,” says Burnson, “it’s that logistics managers now need to leverage the diverse systems that are currently available to them. Once they harness that existing information about their freight and package operations, they can work to improve carrier partnerships and increase speed and efficiency—especially as it pertains to the replenishment of inventory and last-mile delivery.”

Group news editor Jeff Berman offers readers an update on the state of parcel and lastmile delivery options through the insight of top segment analysts. The panel touches on rates, capacity and the impact that the influx of new last-mile providers could have on the segment.

“It’s clear from our panel that this dynamic market has never been more vital,” says Berman. “The enormous amount of e-commerce activity has introduced the need for increased services, not only from FedEx and UPS, but also from new national and regional last-mile providers and 3PLs.”

And when it comes to the e-comm effect inside the four walls, contributing editor Robert Michel reports that investment on equipment, automation and software to meet new fulfillment demands continues at a healthy clip. He puts context around our “Annual Warehouse and Distribution Center Equipment Survey.”

“Last year’s survey reflected the need to quickly ramp up on systems because many operations were in catch-up mode as e-commerce demands skyrocketed,” says Michel. “This year’s survey still indicates a bullish outlook, albeit a more cautious one. Respondents say that they are going to slow down to assess their next best moves, including turning to 3PLs for fulfillment services to reach new markets.”

Logistics professionals have more options than ever to meet the e-comm challenges. But the message throughout our stories this month is clear: step softly and simplify the choices before making wholesale changes. •