July 28th, 2022
LOGISTICS IN AN E-COMMERCE ENVIRONMENT
The innovation of mobile technology allows more individuals to participate in global ecommerce markets. Any individual with a smartphone, regardless of location, can become a buyer or seller with a few clicks. The widespread existence of ecommerce transactions resulted in an increase in transportation and logistics services. Business and individual who shop online/ecommerce are able to access online products across Asia, Europe and USA. Ecommerce consumers who shopped online have shifted to new demands such as to drop shipment into third party logistics provider, instant delivery direct to consumer house, and the capability to have an online tracking. These new requirements have forced independent logistics companies to speed up, adapt and invest in new technologies if they do not want to be left behind.
Most online shoppers like to browse before making a purchase decision. Spending hours searching from one site to another to compare quality, style and price is a common consumer behavior. Shoppers also like to share stories of what they found with friends on social media platform to compare notes with friends. Many products vary in price, style and quality from country to country, which creates a good opportunity for shopper/traveler to buy and re-sell in their home country. However, most shoppers lack of understanding of shipping processes, rules and regulations of import duties, and taxes that must be paid on certain import value products. On many occasions, shoppers are drawn to use an unqualified logistics network delayed or cancelled shipments or overcharging shipping fees or an illegal network that make products become illegal to resell in home country.
With an estimated global ecommerce 2.15 total transactions with total sales revenue of 4.9 trillion in 2021, and expected to reach 7.4 trillion USD in 2025 (Statista), it is vital for logistics companies to think about how to serve ecommerce environment. If you are an owner of a company that has not served this market, long term planning to include ecommerce markets will help increase business and better prepare an integrated service. At origin, service should include: pick up shipment, consolidation staging area and air freight rate. A company at destination who receive shipment should have online customs clearance and delivery capability to the final destination address. Another important ecommerce factor is to participate on logistics platform to allow shopper/shipper to communicate and to interact directly with logistics company.
The process of receiving an ecommerce product from another country requires many steps. Once a shopper has finished shopping on an ecommerce site and has entered new shipment detail information in logistics platform with detail instruction how to pick up its shipment. The platform will trigger a customs procedures menu to analyze each order information to prevent being delayed or rejected at destination during customs clearance. The platform will then display available companies at origin and destination for the shipper to select. Company at origin and destination should accept new orders before invoice is generated automatically to shipper. Once payment is made and receipt is uploaded, company at origin will start to work on the shipment schedule and consolidate by each selected area or country to minimize operation cost and better allocation of resources. Once company at origin finishes their customs handling, documents should be uploaded automatically to company at destination. Company will then able to pre-arrange customs clearance process and prepare schedule to deliver to final consignee address.
Internet and technology innovation will continue to advance due to demand, and consequently, transportation and logistics services will have to respond by keeping up. Every paper has become digital document, and every job function is processed and run by an algorithm to become faster, more efficient and require less human involvement/automation. The world of independent company is becoming more difficult to operate and those that do not follow a digital process are either left behind or have to close their business doors. Transformation into new digital eco-system is not an overnight result nor an easy to do, however, it is something that we all must do to build value of our business services and a long term sustainable partnership.
Eddy Syaifulah, Mahyu LLC