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Flexibility is key to adjusting to e-commerce business model

If you have not already made adjustments to the way you operate to accommodate this still growing trend, now is the time.

You'd have to be living under a rock not to be aware of the explosive growth of e-commerce, but maybe you are not aware of just how significant that growth has been.

The American Transportation Research Institute (ATRI) recently released its report E-commerce Impacts on the Trucking Industry, and here a few of the statistics from the report:

  • From 1997 to 2017 e-commerce sales grew by a 3,000%
  • The annual growth for e-commerce ranged from 13% to 16% over the last five years
  • Between 2015 and 2017 there were 2,130 fewer department stores
  • Last mile fulfillment centers now account for 73% of all industrial real estate

Add to that the fact that customer expectations about delivery times have changed as well. ATRI cites a study conducted by UPS that showed that 63% of survey respondents said that “delivery speed is important when searching for and selecting products.”

Online purchases have also lead to increased focus on reverse logistics as 13% to 30% of online orders are returned compared to only 8% of in-store purchases, the report pointed out.

What has this change meant for trucking? According to the ATRI report, the number of intra-regional and last mile truck trips has increased while the average length of haul has declined. And, registration for single-unit trucks increased by 7.8% between 2007 and 2016, while combination truck registration increased only 4.4%.

According to the report: “The growing decentralization needed for e-commerce has created a decrease in the average length-of-haul. Longer inter-regional or national hauls are now being replaced by shorter intra-regional and local hauls… The average length-of-haul for dry van truckloads has declined almost continuously since 2000, falling by 296 miles, or 37%.”  

I wanted to share these statistics with you so you could see just how epic the growth and impact of e-commerce has been. If you have not already made adjustments to the way you operate to accommodate this still growing trend, now is the time. Do you have the right number of and types of trucks? Do you have flexibility in your operation to adjust to this changing business model? Do you have the proper staff to help manage and operate your business as you adapt to the changes? Have you partnered with the right suppliers who can help you navigate through the challenges of e-commerce, last mile delivery and the increased expectations of customers surrounding delivery times?

Start making changes now because it is a sure bet e-commerce is not going away and even if it does it likely will be replaced by some other new development.

 

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