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Louisville Switching Blog

E-Commerce: Fascinating Evolution to Complete Revolution?

Posted by Donald Robinson

Oct 2, 2018 10:41:59 AM

Everything from meal prep services to groceries, clothes, and even cars can be delivered straight to your door. As such, we think it's a fair statement to say that e-commerce is revolutionizing the way we purchase everything. As a result, brick and mortar stores are having to change the way they operate, the economy is shifting, and the logistics industry is required to become ever more efficient.

In a recent article, Forbes says, "retail is not dead" but that "...boring, undifferentiated, irrelevant and unremarkable stores are most definitely dead, dying or moving perilously close to the edge of the precipice." 

In the digital age where e-commerce is growing at a record pace, the logistics industry is having to pivot how they operate to ensure that the increasing number of deliveries are coordinated with the utmost efficiency and attention to detail. Read below to see our thoughts on how e-commerce affects the shipping and logistics industry. 

Will E-Commerce Replace Retail?

Our answer: we don't know yet. What we do know though is that experts are leading the way in researching this phenomenon. For example, Deloitte took it upon themselves to conduct an in-depth study over more than a year debunking the myth that retail is dying.

They looked at the US economy to see how it performed over the past decade and studied the key measures impacting US households and consumers including income, consumer sentiment, unemployment, and the housing market. They discovered that the situation is much more involved than just a retail apocalypse.

Current economic conditions are good, but not great. The rich are still getting richer and, as food, housing, and health care costs increase, the low- and middle-income individuals are reporting less disposable income to spend. In addition to this, technological advances have influenced consumer behaviors so this debate is no longer simply online versus brick and mortar or even a generational disparity. Income is the key differentiator in how people buy goods. 

E-commerce is vastly disrupting all retail stores. Not only that, but the more e-commerce grows, the more it will impact the overall economy. E-commerce has become the fastest growing segment of the U.S. marketplace and continues to evolve.

How Does E-Commerce Affect Shipping and Logistics?

First, let's start with the definition of logistics. BigCommerce defines logistics as "simply the management of the way resources are obtained, stored and shipped to their end destinations." So, effective logistics is key to e-commerce's success.  

Warehousing, inventory, packing, shipping, and tracking are all part of e-commerce. This looks different at every organization, but here's how we manage logistics within our business. Our parts department is stocked with thousands of parts so when we receive an order, we pull it, pack it, and use UPS or FedEx to ship packages up to 80 pounds. At the end of the day, both UPS and FedEx pick up the packages here at our warehouse. For bigger orders, we will use a truck line, R & L Carriers, as most of these parts will ship out on a pallet. Truck shipments take about 3 days anywhere in the U.S.

After we make the shipping order, we will get a tracking number so if any customer has a problem with the shipment we can track it to see where it is. With the largest UPS hub, Worldport, just down the road, we can ship next day air, second day, or regular ground (about 3 days) anywhere in the U.S. 

We're lucky to have Worldport, the 5.2 million-square-foot UPS processing facility, in Louisville. It's capable of sorting up to 416,000 packages an hour. Talk about logistics. Other companies are also creating new ways to deliver packages to customers.   

Amazon now uses contracted workers to deliver orders and they've recently been issued a patent for their use of drones to deliver parcels. Etsy has created Esty Shipping labels to make it easy for providers to ship goods to their customers. Providers select a carrier (FedEx, USPS, or Canada Post) and enter the shipping details and it's off to the buyer. 

Many packages are transported by aircraft at some point, but they typically make their way to your door by truck. SelectUSA states that, "according to the American Trucking Associations, trucking revenues were $676.2 billion in 2016. That year, trucks moved more than 10 billion tons of freight."

Needless to say, the trucking industry is seeing many benefits of e-commerce and we are excited to be a part of this industry and see how it continues to evolve.