Evolution is a necessary process for an industry or business to become stronger, bigger and more capable. It varies in different sectors and specifically for the transport industry where it is more about client service, where the industries’ success is determined by cost-effectiveness, efficiency, and flexibility in service delivery. In the past, retail transportation was all about supplying the precise quantities of products towards the exact locality on an agreed consignment schedule. Today, evolution in the industry has come along with e-commerce which has productively impacted the economy and the transport industry as well. However, developments in the consumer-driven ways have been accompanied by a few drawbacks. The paper seeks to discuss possible actions to counter the drawbacks of e-commerce as a strategy to better intermodal transportation.
The transport industry has diverse modes of transportation, namely road, rail, maritime and air transportation. All the mentioned modes make up intermodal transportation where the advantages of the respective modes are fully exploited. It involves modified transport techniques of goods of any size, starting with large cargos all the down to small parcels. For instance, special containers used in transportation are individually designed in a way they can be handled by different modes of transport (Agamez et al., 2017).
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E-commerce of which is regarded as business operations over the internet has come up as the fastest growing sector in recent years; industries have registered their presence in the industry. On the other hand, purchases made by consumers have drastically increased of which have impacted shipments moving through the transportation industry. As e-commerce continues to establish and grow, so will the economy through its impact on inflation and productivity.
Logistics is the backbone of e-commerce, repercussions of e-commerce impacts e-commerce by either limiting supply chain elements or affecting the rise of an e-market. Transport industries have adapted to information technology programs so that their chain supply skills are updated to match with the current trends in other sectors. IT is crucial in conducting business strategies so that a competitive end is arrived at; it includes software systems that are crucial in the logistics process.
For instance, in a transport planning system (TMS) which is used for efficient order accomplishment, for the order to be fulfilled there must a shipping process involved between a buyer and a seller. This results in the holding and building of inventories and warehouses respectively, finally, there is the delivery of the goods to the customer by a shipping agency (logistics carrier). E-commerce now plays a role, since the shipping could be from a shipper specific or buyer specific it leads to the creation of a variety of options for those involved in the supply chain. It results in the flexibility of the shipping agency as there are different opportunities for players.
Today, it is evident that e-commerce has impacted on intermodal transportation in many ways. Starting with less-than-truckload (LTL) carriers, they handle the middle mile transportation orders for retailers and manufacturers to consumers. The challenges created by the new market change include frequent requests for more deliveries, ever decreasing delivery periods and smaller shipments that are inconvenient for the carriers. It is a negative impact of the e-commerce trend which requires adaptability measures to fit in the system where purchases of different equipment are being made, millage expansion and the addition of guaranteed services, all possible solutions (Zhang et al., 2017).
For the LTL or other related carriers, adding a considerable number of smaller trucks in the fleet will help satisfy the demand of lower shipments to customers. By operating as a local operator bulk break no longer remains an issue, freight is transported from the pick-up station to the required delivery place; this results in less handling and time. Furthermore, there is an opportunity for selecting the most appropriate vehicle in transporting freights regarding the size. Availability of a service line, Old Dominion Freight Line (ODFL) addresses the request for smaller and more common shipments by adding smaller service centers and hubs.
Another adverse effect of the e-commerce explosion is the growing severity of penalties being imposed by retailers due to early or late shipments. Retailers have necessitated complexity in the supply chain which has made the Inventory management to be a critical factor. Others have implemented stricter delivery requirements in an aim of exerting more significant control over supply chains. ODFL has developed a service to help shippers avoid hefty fines, for instance, a Must Arrive By Date (MABD), which allocates a customer service representative to a transporter. It plays a part, as the only point of assessing details about MABD shipments. Dynamic in-transit upgrade is also another important feature which helps shippers get in line with delivery windows.
MABD customers are better served by a department which was developed by ODFL to facilitate the handling of MABD freights better and contrarily to non-time-definite freights. Carriers have also been assured a Friday to Monday delivery period with an OD Expedited On Demand services and Weekend Promise. These have availed by the ODFL to meet the needs of the consumer-driven market (James, 2018).
ODFL can facilitate the LTL services, and serve retailers and manufacturers, irrespective of the dynamic market. These have been possible due to some reasons, including, work plans that have done for years and technology investments. In addition, ODFL’s network has been eased by the use of paperless docks; also web-based applications and portals have quickened the operations.
Many transporters are in search of a sole provider to meet the last-mile delivery and to manage every phase of an e-commerce transportation’s lifecycle, just like a one-stop shopping like Amazon. XPO Logistics introduces the mentioned sole provider as the value proposition in the e-commerce supply chain, where it established itself in the LTL trucking since 2015. Currently, XPO has transportation and logistics as its two reporting segments. LTL is the underdog in the combination of XPO services as they do not offer the last-mile services, which is not the case to the large shippers who offer it.
Surprisingly, XPO has invested a lot of money in the LTL for it to be fully compatible with e-commerce and to ensure the delivery of heavy goods. With the many skilled employees and the wide range the cooperation covers, it can meet high customer standards. The cooperation is mostly ahead of the customers’ needs as it has the services of skilled professionals who foresee future trends and demands. With the cooperation, LTL carriers can meet the consumers’ satisfaction, starting with service delivery, technology and flexibility. It makes them more than just fine in the e-commerce world.
The parcel industry is also challenged in this period of explosive e-commerce; the sector is unable to meet its profit as it used to earlier on. It is because of the increased number of stops in each delivery and also size increase, whereas faster deliveries are a requirement from the customers. It has affected higher charges for the services; however, it is not a long lasting solution in countering the challenges. Shippers have also increased the parcel sizes, for instance from 70 to 150 pounds, which seem odd from the standard parcels. Moreover, they end up taking up much space in trucks and time wastage when loading and off-loading of the parcels in trucks.
For the parcel carriers to fit in this era of e-commerce they are required to collaborate and as a team, work hand in hand with the players of e-commerce, and retailers to find innovative solutions. Addition of more parcel stores or pick up stations, and incensement in package deliveries have resulted in declining of delivery costs. Doing business with high-volume retailers have proved advantageous to both parties; for instance, many packages may be consolidated into a full truckload but if they are headed for the same local shipper terminal. This process also reduces the cost for both the retailer and the carriers by inducing load into the transporter’s network and nearer to the final client, and by minimization of load handling. A transport management system (TMS) can also help both parties, shippers, and customers by aiding in the realization of cost-effectiveness and customer experience. It automates business’s decisions whether it’s by air or ground, parcel or LTL, making the business meet the challenges during high demand deliveries.
Consumers are demanding more and more every day due to the development of mobile commerce and the facilitation of mobile devices, in tracking and delivery time. Customers’ choice is continuously increasing with the development of e-commerce, making them want to be delivery-updated every time. Tracking also counts, shoppers often feel anxious when their goods take too long, but that is not the problem. The challenge arises in the tracking accuracy, how long a freight is expected to reach its destination. For instance, in international postal delivery, tracking is not convenient as there are cheap shipping products. Many companies are adapting to systems that shows the driver’s location and directions for the buyer to check on.
Currently, there is an observable technology trend that has impacted on many areas, including logistics and the general global economy. Widespread usage of smartphones and Wi-Fi have greatly impacted consumer behavior; this change has fired up e-commerce into the retail and logistics sectors. The change has affected the supply chain resulting in its re-adoption and reinvention to offer a new form of relation between customers and itself.
Technology advances have influenced the online retail sector resulting in the change in behavior purchasing habits of consumers. In the past customers visited retails shops for shopping but as of now, shopping is done at the comfort of their homes. It has made e-commerce retailers change their real estate occupation from classic retail locations to warehouse space. More massive warehouses are essential in the supply of freights and facilitation of the shopping experience. The development of e-commerce has changed the consumer’s needs; in turn, the consumers have altered the supply chain due to the fixing in of warehouse in the chain. Technology has influenced higher expectations in customers; this was an experienced challenge at the start of the e-commerce era. In the logistics industry, it is no longer an issue as the industry has coveted bigger warehouse spaces. The supply chain has been shortened as consumers are directly linked with the consumers, but not through the shops.
In the future, the transportation industry should adopt mobile computers, scanners, and printers for voice-direction technology and accurate data capture. It should help meet the ever-growing consumer expectations by reducing errors, costs, and increase speed. Also, the collaboration between various transportation industries will influence green initiatives.
References
Agamez-Arias, A. D. M., & Moyano-Fuentes, J. (2017). Intermodal transport in freight distribution: a literature review. Transport Reviews , 37 (6), 782-807.
Hesse, M. (2016). The city as a terminal: The urban context of logistics and freight transport . Routledge.
James, E. (2018). LTL carriers: e-commerce powerhouse: less-than-truckload carriers are developing new strategies to serve retailers and manufacturers who create the goods that impatient e-commerce consumers expect will be delivered fast and free. Inbound Logistics .
