E-commerce appears to be all about ease of doing business and the ability to receive products quickly at your home. However, as one parcel company�s television commercial graphically depicts, you do not click a button on your computer and have the item pop out of your laptop. In short, e-commerce is not magic. It is hard work for both e-tailers and transportation services providers.
Increasing numbers of companies have jumped on the e-bandwagon, leading to unprecedented order volumes during the last holiday season. New cyber merchants are quickly realizing what traditional businesses have known for some time. The sale is not complete until the product is delivered in pristine condition to the proper customer at the agreed upon time. The logistics of making e-commerce work can be especially challenging for these new entrants who may not have the infrastructures or expertise to ship products quickly.
Experienced shippers know the right questions to ask to support e-commerce, but still find it difficult to develop processes that work and to execute them flawlessly. E-commerce is a relatively new market for many companies, with little quantifiable data to assist with planning. Further, the concept of e-commerce implies fast, if not instantaneous delivery. With the continuing move toward reduced inventories and lean manufacturing operations, can the company produce and deliver products fast enough to meet customer desires?
E-commerce also means home delivery. Home delivery is a unique business with a limited number of providers and many variables. Can your company accept a driver release as opposed to a customer signature? Can you find a carrier who makes Saturday or evening deliveries? Many customers prefer to receive deliveries when they are home, not during the traditional workweek. Oversized items such as washing machines often move by tractor-trailer units. Can a large truck deliver in a suburban neighborhood or on a city street? And few residences come complete with loading docks. Can the driver also install the unit? Still, another consideration is security when delivering high-dollar items, such as jewelry.
E-commerce also has implications for transportation service providers. Companies that have traditionally delivered to warehouses or retail stores may find their freight volumes decreasing as these same clients are selling more products direct to consumers via the Web. Some companies, such as Yellow Freight, are responding by offering home delivery of items in excess of 150 pounds (the limit for some parcel providers), in addition to their LTL business. Yet, there are new opportunities for carriers and warehouse service providers because many Internet retailers have begun marketing with little or no plan for delivery.
Parcel delivery companies and the U.S. Postal Service, who have traditionally provided home delivery, were faced with tremendous volumes during the past holiday season. Going forward, they must be positioned to deal with any capacity issues resulting from
e-commerce. Because of this increased demand, other parcel providers are making forays into home delivery in addition to their business-to-business services.
It has been said that great ideas must be accompanied by hard work to be effective. Those shippers and providers who rise to the challenge of making e-commerce work may well find that it is magic; offering new revenue streams, providing opportunities for greater market penetration and encouraging a host of new alliances with former competitors.
Debra Phillips is the executive director of NASSTRAC. Based in Washington, DC, NASSTRAC is the only shippers association focusing on less-than-truckload (LTL) and packaged distribution. She has worked in the transportation industry for 10 years, most recently as manager of Corporate Communications for Penske Truck Leasing. She also served as manager of Advertising and Public Relations for Carolina Freight Corporation for five years.