Find the E-commerce Impact on Transportation in the next 5 Minutes.
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E-Commerce Impact on Transportation
In an e-commerce business where on-time delivery is the foremost factor, it is important to understand how a logistics work. Logistics has always been a great stumbling block, especially in a country like India. Improper delivery, product returns, misrouted item. The terms sound familiar, right?
With just a few mouse clicks or screen taps, a growing number of people are buying just about anything they want, and from anywhere around the globe. On the front end, the art of shopping has been distilled down to a very easy, tech-enabled process. On the back end, the science of getting those orders fulfilled and shipped within ever-shrinking timeframes is anything but easy.
E-Commerce Impact on Transportation-
The e-commerce sector has become more competitive than ever and hugely impacting the logistics business. the impact it had on other sectors like logistics has been tremendous. So much so, the global logistics market in the e-commerce realm is expected to reach $726 billion by 2020.
In this competitive environment, as the customer’s demand is increasing every day, companies like FedEx are launching different fulfillment services to reach the global network.
The sellers are distributors are also looking for better ways to carry out hassle-free shipping, and different logistics industries are bringing in a series of innovation to make the process as advanced as possible. They are even supplying perishable goods within two hours of order placeme
In this ruthless environment the customer’s demand is escalating every day, prominent transportation industry are initiating different fulfillment services to reach the global network. The sellers and distributors are always looking for better ways to carry out hassle-free shipping, and different logistics industries are bringing in a series of innovation to make the process as advanced as possible. They are even supplying perishable goods within two hours of order placement..
The E-commerce market has provided a boom to the transportation industry. By some estimates, the B2C e-commerce is expected to generate $3.2 trillion in revenue by 2020, while the B2B e-commerce market is expected to be twice that size.
In terms of transport revenue, global B2C e-commerce produced $85 billion in 2015, and is expected to grow by a 15% compound annual rate by 2019. That level of demand is going to ad pressure to the already stretched equipment supply. It may be the best time to seek the expertise of a qualified 3PL to help navigate what are sure to be rough waters in terms of equipment availability and supply chain readiness.
A 3 PL has multiple resource options to address the myriad of delivery demands that the future of e-commerce is absolutely going to generate. E-Commerce Impact on Transportation and Logisitics is escalating day by day.
Trucking Industry Impacts
E-commerce Impact on Transportation is Real. The trucking industry provides the critical linkages for the omnichannel needs of retailers, from the first mile to the last mile and back again
The regional fragmentation of supply chains and distribution/fulfillment networks has forced retailers and their supply chain partners to rely more on motor carriers; truck transportation is best equipped to provide the flexible and reliable services needed by JIT inventory management systems, decentralized distribution/fulfillment networks, and tighter delivery windows. Changing Industry Operations
There are two characteristics of omnichannel business models that have had the greatest impact on trucking operations:
1) the re-emergence of decentralized hub-and-spoke distribution/fulfillment networks; and
2) a greater emphasis on reliable deliveries throughout these networks as delivery windows continue to shrink.
In retail today, consumers expect fast and efficient delivery. The rise of retailers promising quick shipments has impacted how the trucking industry operates. In 2017, “Last Mile Fulfillment Centers” represented 73% of the industrial real estate market in the US.
New research by the American Transportation Research Institute has highlighted how the growth of e-commerce is leading to an increase in the use of single-unit trucks. It’s also changed trucking routes and mileage. As more retails promise fast delivery, and more consumers expect it, intra-regional and last-mile truck trips increase. This has pushed down the average trip length of truckers by 37%.
This rise of e-commerce has had both negative and positive impacts on the trucking industry. Shorter and more centralized trips are highly appealing to the new generation of truck drivers. In the US, drivers must be 21 or older to complete cross-state trips, which means the high number of local e-commerce deliveries provides more job opportunities for this demographic.
There are some downsides to the rise of e-commerce though. Retailers are compressing delivery windows, carriers have to operate with faster turnaround times, and failure to meet these tighter windows, regardless of traffic and weather, can result in fines from the retailers. E-Commerce Impact on Transportation and Trucking Industries is serious.
While retailers are enforcing tighter and stricter delivery windows, overall e-commerce has been beneficial to trucking. Many of the top issues identified by truck drivers are positively impacted by e-commerce. Local hauls open up job opportunities for younger drivers and also increase driver retention, as localized trips are more appealing and sought after. Short-haul operations also not required to be reported on Electronic Logging Devices (ELD), allowing drivers to operate under more flexible hours of service regulations.
The rise of e-commerce over the last 20 years has placed pressure on the trucking industry to adjust its operations and adapt to shrinking delivery windows and shorter hauls, according to the latest study from the American Transportation Research Institute.
ATRI notes the rise of online shopping and e-commerce could be good news for the truck driver shortage – the top issue facing the trucking industry according to ATRI’s annual fleet survey – as local pickup and delivery operations keep drivers closer to home, eliminating a frequently cited quality of life concern for truck drivers. However, ATRI says this could also lure drivers away from the truckload sector, further exacerbating the high turnover rates for truckload carriers.
The move to more local hauls could also be leveraged as a training opportunity for young truckers, ATRI says, as they could acquire training and experience between the ages of 18 and 21 hauling locally before transitioning to interstate operations when they turn 21.
Since 2000, the average length of haul for dry van truckloads has fallen by 296 miles, or 37 percent, from about 800 miles per trip to about 500 miles per trip. The impact has also been seen in less-than-truckload and courier services, ATRI reports.
Overseeing Changing Consumer Expectations
Purchasers have gotten familiar with amazingly speedy conveyance and, as more retailers offer quick, free transportation choices, logistics companies should adjust to the ever-expanding conveyance pressures that adjust to advancing shopper desires and inclinations. E-commerce impact on transportation changes the customer expectation.
In doing so, the dynamics of the supply chain are fundamentally shifting as companies are augmenting traditional long-haul delivery with just-in-time (JIT) delivery and suppliers are transitioning from multiple storage facilities to single warehouse locations to meet local needs. This often results in a need to change the composition of fleets and invest in smaller trucks and vans that can provide the shorter, more frequent runs needed to accommodate an increase in last-mile delivery.
In fact, 44 percent of fleet managers surveyed in April at the NAFA Institute & Expo, said that they will invest in different asset classes to address these priorities. Seventeen percent indicated they plan to adjust their fleet composition to favor last-mile delivery, and 33 percent are expecting to increase the size of their fleets.
As e-commerce based business keeps on rising, all things considered, organizations should keep on modifying plans of action to suit the quick, free and advantageous conveyance administration that shoppers request. Last-mile conveyance particularly will be a key zone of center for organizations hoping to contend in the web based business domain against monsters like Amazon.
Top Issues - E-Commerce Impact on Transportation
Since 2005, ATRI has conducted an annual survey of motor carrier executives, commercial truck drivers, and other trucking industry stakeholders to identify the critical issues affecting the trucking industry. In the 2018 survey, the industry ranked the following as their top industry issues:
1. Driver Shortage
2. Hours-of-Service (HOS)
3. Driver Retention
4. Electronic Logging Device (ELD) Mandate
5. Truck Parking
6. Compliance, Safety, Accountability (CSA)
7. Driver Distraction
8. Transportation Infrastructure/Congestion/Funding
9. Driver Health/Wellness
10. Economy To fully assess how e-commerce and omnichannel retailing are affecting the trucking industry, the remainder of this study focuses on the implications of e-commerce on the industry’s critical issues.
1. Driver Shortage
There is a widespread conception that the trucking industry suffers from a lack of drivers, but some experts say those concerns are overblown.
The industry was short about 60,800 drivers in 2018 – a roughly 20 percent increase from the year prior, according to the American Trucking Associations. The shortage is expected to balloon to more than 160,000 by 2028, and ver the next decade, the industry will need to hire 1.1 million new drivers – many to replace older and retiring workers.
Perennially ranked as a top industry issue, the Driver Shortage topped the list in 2017 as an improving economy fueled concerns that the demand for truck drivers wouldfurther outpace the supply of qualified drivers. The shortage of for-hire drivers stands at 51,000 drivers. Aside from a growing economy, other factors also contributing to the driver shortage include driver retirements and competition from other industries. The growing demand for truck transportation from e-commerce is further exacerbating the industry’s issues with vehicle capacity and truck driver demand.
However, the changing supply chain and distribution/fulfillment models of e-commerce and omni-channels may present a solution for attracting more qualified truck drivers. Local P&D operations provide the
type of jobs that will keep drivers closer to home, thus eliminating a frequently cited quality of life concern for current truck drivers and potential new entrants. The benefits of shorter truck trips also extend to drivers in the TL and over-the-road LTL segments of the industry, as the shorter intra- and inter-regional hauls needed to support omnichannel fulfillment networks may offer a more stable and predictable work schedule and provide drivers more home time.
“Hours of service” refers to the maximum amount of time drivers are permitted to be on duty including driving time, and specifies number and length of rest periods, to help ensure that drivers stay awake and alert. In general, all carriers and drivers operating commercial motor vehicles (CMVs) must comply with HOS regulations found in 49 CFR 395.
3. Driver Retention
The natural shortage of truck drivers in the trucking industry has become a noticeable issue, and it isn’t likely to be resolved anytime soon.
According to a recent survey of 24,000 drivers, more than 30% drivers quit within the first 3 months. Additionally, approximately 50% leave within the first 6 months. Those are alarming numbers, which only highlight the importance of driver retention and driver satisfaction.
4. Electronic Logging Device (ELD) Mandate
These devices are designed to record data related to operation of the vehicle and to driver activity. The driver information mainly concerns hours of service, or HOS. Commercial truckers are restricted to a maximum number of hours they are allowed to drive between rest periods. HOS is a permanent record of driving hours, on-duty hours (when drivers are working but not driving) and rest time, over the course of a trip.
5. Truck Parking
Finding available and safe parking has been a problem for more than a decade. However, in recent years this issue has gotten worse as many states have closed down rest areas as part of cost cutting strategies, changes to hours of service (HOS) rules and an increase in freight volume. More trucks on the road, more requirements to stop and rest, and fewer locations for trucks to stop has created a formula for increased driver frustration.
E-Commerce is Redefining Transportation Practices
For retail shippers, some time ago “meeting client desires” implied providing the correct amounts of item to the correct area on the settled upon shipment plan. Transportation modes, load sizes and separations voyaged were known and predictable. Item conveyances were gotten by back-office dispatching and accepting experts knowledgeable in taking care of mass item.
Those days are no more. With the development of web based business nearby customary channels, measuring up is presently undeniably all the more testing.
Continuing growth of online-driven business-to-business (B2B) and business-to-consumer (B2C) sales demand has magnified the criticality of meeting customer expectations. Shippers will directly improve win probability by reformulating e-commerce transportation strategy and executing operational practices that enable delivery speed and certainty – along with dependable and flexible service – to yield a better customer experience. Consider the following:
By any mode or means: Shippers can no longer rely on expertise in a single mode of transportation. E-commerce fulfillment parameters are much more inconsistent than those for bulk shipments, so shippers must ”automate” the mode that best accommodates each shipment’s weight, dimensions, distance to destination, delivery requirements, special handling needs and other direct-to-customer variables.
First and Last: Shippers with the capacities to execute first-mile and last-mile transportation are better situated to control costs, guarantee conveyance speed and exactness and advance the client assistance experience.
Clear Line-of-Sight: An e-commerce transportation solution must enable comprehensive visibility yielding end-to-end transparency across your entire network. You must be able to see at a macro-level and manage at a micro-level to operate effectively and deliver sustainable competitive services at profitable margins.
Transportation organizations that structure flat-line decision making, integrate multi-modal technology and processes and utilize dynamic reporting tools for forward decision-making will be in a superior position to navigate the new e-commerce environment. They will also be well-positioned to capitalize on the e-commerce evolution and its associated customer service expectations.
With the Latest Trends and Updated Technology Lot Of Things Have Changed. E-commerce impact on transportation is redefining Transportation Practices.
What is the role of transport in commerce?
One of the most important aspects of an organization’s economic activity is transportation. Transportation offers the vital function of connecting a firm to its suppliers and consumers by transporting items from areas where they are sourced to locations where they are wanted. This connects the company to its suppliers and customers.
What are the modes of transportation in e-commerce?
Building an effective supply chain using the six primary modes of transportation (road, marine, air, rail, intermodal, and pipeline) is an important aspect of transportation management. Pipelines are another important form of transportation. To construct a functional supply chain, it is essential to have a solid understanding of both the benefits and drawbacks offered by each modality.
You May Also Like To Read: 4 Modes of Transportation – Best Way of Moving Your Cargo
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