How to choose a logistics provider for your eCommerce business? Tips and tricks from a logistics expert
Time is of essence in the eCommerce industry. Customers expect that the products they order will reach them as soon as possible. Today, same-day delivery is becoming a standard service, especially in large urban areas. Many eCommerce companies face the challenge of finding logistics partners that provide the best service and on-time deliveries. What do you need to know before choosing a logistics partner for your eCommerce business?
Nowadays, it is difficult to list goods that cannot be purchased online. Online sales – something that was just a novelty 20-25 years ago – is an everyday convenience for almost all of us today.
How big is the global eCommerce market?
The number of online buyers – according to Statista estimates – will reach the level of nearly 4.9 billion people in 2025. Other data collected by Statista prove how fast the eCommerce industry is growing. While in 2015 eCommerce accounted for 7.4% of total global retail sales, six years later it was 19.1%, and in three years from now – according to forecasts – it will be 25%. Research and Market analysts estimate that in 2027 the value of the global eCommerce market will amount to USD 27.4 trillion (in 2021 it was USD 13 trillion), which means that in the period 2022-2027 the average annual growth will reach over 27%!
What are the main trends in eCommerce in 2023?
The dynamic development of eCommerce is driven by both the development of technology and customer expectations. One of the currently dominant trends is sales via mobile applications (m-commerce). Again, let’s refer to Statista data: 73% of traffic in e-shops takes place via smartphones or tablets, and the number of transactions made in this way reaches 63%. Today, leading eCommerce businesses cannot survive without a dedicated mobile application. The requirements of customers who prefer shopping with the option of deferred payment or with the option of searching for products using voice tools are constantly growing.
For customers of e-shops, the convenience of online shopping, which can be done 24 hours a day, seven days a week, is equally crucial. Security related to online shopping is also of great importance, including full and reliable information about the current status of the shipment, including its real-time tracking.
Additionally, customers increasingly highlight cruciality of omnichannel solutions, such as the possibility of buying goods online with the option of returning them in a traditional store, as pointed out by the authors of the Coyote Logistics report “European Logistics Trends: How the Ukraine crisis, COVID-19 and shortage of goods are impacting supply chains”.
Currently, we are also on the verge of a new revolution in eCommerce, which will be brought about by the increasingly rapid development of AI. So, if we agree that it is the convenience of users that drives the development of eCommerce to a large extent, then one of its most important aspects is the need to save time and simplify the process of returning goods. Today, overnight delivery is a common standard, and customers (especially in the largest cities) can expect same-day deliveries, or even within an hour of ordering. Online shoppers aim to save time and also require more flexibility from the eCommerce platforms they visit.
All this poses new challenges to eCommerce companies in relation to the organization of the supply chain, in order to respond to the needs of their customers as effectively as possible. This, in turn, means that these entities face the need to find the right logistics partner, i.e. one that will provide the most effective and flexible services tailored to their business.
What should eCommerce companies pay attention to before choosing a logistics service provider?
Regardless of the chosen mode of operation (own warehouse, dropshipping or fulfillment model), when choosing a logistics partner, an eCommerce company should pay attention to the following issues:
1. Slot booking
Market experience, an extensive network of cooperating carriers, a 24/7 customer service team, digital solutions that allow you to easily order transport – these are must-haves for every professional logistics service provider.
In addition, the logistics partner must provide the customer with the loading/unloading slot booking. What does this mean? Slot booking is a reservation of a date when a truck can drive to a distribution center (it can be an e-shop’s own or external warehouse) and pick up or deliver prepared loads. Slot booking is made in the IT systems of distribution centers. Proper booking and its management (booking changes) minimizes the risk of supply chain disruptions, allows for timeliness and is an important element of the shipment tracking process (reliable status information that the consumer receives in his application).
2. Deliveries directly to distribution centers of courier companies
Another thing to pay attention to when choosing a logistics service provider for eCommerce is whether it provides services involving the transport of cargo directly to the distribution centers of courier companies (from there, the shipments will be handed over to couriers for delivery to final recipients). In the industry literature, this type of transport is referred to as line-haul.
3. Access to airports
If an eCommerce company imports or ships products by air, then the cargo must be picked up or delivered to the cargo area at the airport. In such a situation, you should choose a logistics service provider that provides carriers with all the required permits and appropriate insurances to enter the airport and pick up or deliver cargo.
4. Support during seasonal peaks
“Peak season” is the hottest time of the year for online stores and platforms. At this time, there is the greatest increase in sales, when e-shops can record an increase up to 40-50%, and on some days even above 100%. Peak season usually runs from Black Friday (end of November) to Christmas. All eCommerce enterprises always prepare for the peak season well in advance, as do their logistics partners. However, it may happen that it is necessary to suddenly provide additional supplies. Therefore, the ideal logistics partner should offer additional support during the peak season and be able to increase capacity in the short term.
5. Customs clearance support
Along with the development of eCommerce companies, the area of their business activity is also expanding beyond the countries in which the company is registered or has distribution centers. Order deliveries include countries where it will be necessary to release goods for circulation, i.e. customs clearance, payment of duties and taxes. For example, let’s take British e-shops that delivered goods to continental Europe and vice versa: eCommerce companies from Europe shipping to the British Isles. After Brexit, they have to face additional difficulties introduced by new customs regulations. Such entities should look for an external provider that handles just their customs procedures.
6. 24/7 shipment tracking
This has already been mentioned before, but it is worth emphasizing this aspect once again. The ability to track shipments is important not only for end customers of e-shops, but it should also be taken into account by eCommerce companies looking for logistics service providers. Enabling access to monitoring the status of transports in real time, 24/7 (preferably using a dedicated digital platform) should be one of the criteria for choosing a logistics partner. Full knowledge of where trucks and loads are located at a given moment and what the next stage of their journey will be minimizes uncertainty and increases business security.
These are the most crucial issues to keep in mind when looking for and choosing a logistics service provider for an eCommerce company. It is worth remembering that the more effective the partner, the greater the guarantee of timeliness, which is of key importance for a business so heavily dependent on time pressure, such as eCommerce.
Monika Hapter, EU Director, Sales, Coyote Logistics
If your company operates on the eCommerce market and you are looking for a new logistics partner, use the services of Coyote Logistics. Check to what extent we can support your business, find out how others evaluate cooperation with us, and then contact our specialists. We will answer all your questions and then help your company spread its wings.