Widespread changes to standard shipping strategies reflect an industry rapidly evolving to meet shifting demands with sustainable, tech-driven solutions.
If you’ve been in the shipping and logistics industry long enough, you know that the only constant is change. With the increasing dominance of ecommerce, companies need to adjust their shipping strategies to keep up with their younger, agile competitors and meet increased demand both efficiently and effectively.
To make sure that you’re keeping pace with these changes, it’s important to have an idea of what technologies and strategies other professionals are turning to in order to stay competitive. Logistics Management’s “2017 Warehouse and Distribution Center (DC) Operations Survey” confirms that shipping and logistics professionals aren’t taking the changes driven by ecommerce lying down. Capital expenditures are up, new fulfillment centers are coming online, and robotics are helping warehouses compensate for potentially lasting labor trends.
Closing the Gap
In the past, the bigger the distribution center, the better. But ecommerce has changed the game, with an increasing number of shippers now relying on smaller fulfillment centers located as closely to their customers as possible. In fact, average building clear height, common square footage per building, and total square footage in distribution networks were all down in 2017.
That doesn’t mean that warehouses are closing their doors, however. Instead, it shows that the types of warehouses available in distribution networks are diversifying to meet ecommerce targets. Rather than store inventory in a single warehouse, companies are using a number of smaller, strategically located distribution centers, helping them fulfill orders quickly and cost-effectively. With 17% of respondents to the Logistics Management survey planning to expand their total number of buildings, it’s clear that the industry understands that sprawling distribution centers are no longer a one-size-fits-all solution to inventory and processing needs.
Following New Rules
Tech is transforming shipping, and industry-wide investment in emerging technologies in recent years suggests that companies are adopting an approach to problem solving inspired by their peers in the tech industry. While only 3% of shipping professionals used automated order picking in 2016, for example, 10% did so in 2017. Similarly, the usage of voice-assisted solutions, advanced robotics, automated storage and retrieval systems, and autonomous vehicles increased in the last year.
Shipping and logistics professionals are also deploying recent productivity metrics as they focus on streamlining order fulfillment. Increasingly popular metrics, such as units/pieces per hour and orders per hour, point to an industry that’s anxious to prove that it can adapt to the model pioneered by ecommerce and thrive in the process.
Avoiding Pain Points
The survey indicates that it’s becoming increasingly difficult for distribution centers to find and hold onto quality talent. And since ecommerce relies on efficient picking, packaging, and shipping to fulfill orders as quickly as possible, the labor shortage is only going to get worse as online business grows.
With 49% of survey respondents citing labor shortages as their most serious concern, increasing capital expenditures in automated and robotics technologies are clearly aimed at helping warehouses meet their goals with fewer staff. 95% of survey-takers have implemented cost-cutting measures — the most popular being improving and streamlining warehouse processes — thus demonstrating that the time to solve these problems is now, not later.
3PL in the Age of Ecommerce
Increasingly, businesses are looking to form partnerships with reliable shipping and logistics partners to help them thrive in a digitized marketplace. Integrated logistics services providers (ISPs) bring expertise, technology, capacity, and expansive trading and distribution partnerships to the table. As the number of survey respondents who self-distribute falls — from 42% in 2016 to 37% in 2017 — the current economic climate makes now a better time to partner with an ISP to optimize your warehousing, fulfillment, and distribution strategies.
Primary Freight has been successfully operating in the international and domestic shipping and logistics markets for more than 20 years. We’ve consistently set ourselves apart from other ISPs by focusing on innovative technology, quality customer service, creative problem solving, and close collaboration with our partners. If you’re interested in outsourcing any and/or all of ecommerce program, get in touch today and learn how Primary can drive more value and help you achieve your unique business goals.
If you’re interested in learning more about our award-winning services and support, give us a call today at (800) 635-0013.