With the ascendance of Amazon, major Ecommerce players and changing consumer/B2B purchasing behavior; the logistics landscape is forever changing
According to a recent study by ComScore 78% of of the US population purchased an item online last year and that is only expected to increase. And with the rapid expansion of same day delivery and even delivery within 1-3 hours, ecommerce is changing what logistics is capable of, while opening up major opportunities both for manufacturers, marketers and 3PL companies to better connect with their clients.
Today on average e-commerce accounts for 11.85% of North American 3PLs’ revenue, according to the 2016 3PL Study. The CEOs of the leading 3PL companies project that in the next year this will increase to more than 20% of overall revenue with the continued focus and importance on next day delivery and the partnering with 3PL’s for last mile delivery. At the same time a growing share of last mile service is also starting to be taken over by the “sharing economy” with initiatives such as Amazon Flex and companies like Uber getting into the delivery space.
Another major area of growth noted in the study is international e-commerce. For example European ecommerce accounted for around 5% or North American 3PL revenue, but is projected to grow to 9 percent in the next three years. The APAC region will also continue to explode in the coming years as well. (China’s current economic woes notwithstanding)
There is a tendency to see the biggest opportunity being having the opportunity to partner with Amazon. That said longer term, ecommerce companies are looking to build out their global supply chains outside of Amazon and move to direct to consumer models. Especially in these formative years, 3PLs will play a major role in helping companies expand in their international market coverage
What are the keys to ecommerce success for logistics companies moving forward? An increased focus on providing innovative order fulfillment services, keeping up to date with the nimblest logistics software and providing reliable, disciplined same day delivery services.
It is an interesting time to be in the logistics industry for sure!