The impact of rising e-commerce growth on logistics companies?

[David White]

In the past few years, ecommerce has witnessed a staggering growth given the improved awareness among the public, infrastructural improvement, and appealing online shopping offers among many other things. This exponential rise of ecommerce and digital marketplace phenomenon is also regarded as “The Amazon Effect”.According to Statista, global ecommerce sales are projected to grow into a whopping $ 7.4 trillion industry by 2025.Among these,the cosmetic industry and online brands such as Brandcosme.com - Clinique share a major share.

While it appears to the uninformed that an order is placed on the one hand and delivered to the consumer on the other. However, there is a lot more going on behind the scenes of this seemingly straightforward operation.

Today, one of the most pivotal factors and driving forces of an ecommerce business is on-time delivery, and it’s simply unthinkable with a good logistics company.As the success of an ecommerce company hinged on timely delivery of products, the role of logistic companies greatly increased and they oversaw a sea of changes. To cut through the competitive market, online businesses today offer their clients a 24-hour delivery service. It was a major challenge for logistics companies as they responded by fast-tracking each and every step involved in the shipping of the product. From warehouses to delivery drivers, the script for everything in the logistics company was written anew.

The old, manual working method of logistic businesses was modified, and technology was brought into the industry so that items could be delivered in the smallest amount of time possible. This was done in order to meet the need for faster delivery of goods. In this sense, the finest example is the technology that allows drivers for on-road logistics companies to automatically generate devise the quickest route possible for their trips.

In order for logistic firms to accommodate the growing demand in the market, they were required to construct supporting systems that corresponded to the requirements of the customer at every stage of the process, from the collecting of the goods through its packaging and delivery. Additionally, logistics had to make room for the returned packages from customers who were unhappy with their service.

Becuase online retail companies grow in size, they have to expand their distribution systems to meet rising consumer demand.Also, in order to deliver customers’ orders, retailers were required to keep more inventory on hand all the time. As a result, the procurement of warehouses at strategic locations depending on business needs became significantly important for the successful operations of an ecommerce logistic business.

Today, as e-commerce operations scale up, the competition for warehouse space near major cities is also getting tighter and tighter. Real estate prices have risen at exorbitant rates due to high demand in the key cities. As a result, the market for logistic companies has become saturated over time, and for the newer logistic businesses, it has become difficult to rise as a logistic company.

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