CORONA CRISIS ACCELERATES STRUCTURAL CHANGE
Digital solutions support logistics companies in the competition
for e-commerce partnerships
Bordesholm, October 1, 2019
CHAPTER 2
Online retailers under pressure to succeed determine the logistics requirements
Since availability, speed and the process of delivery reflect directly on the online shops, e-commerce providers are looking for reliable carriers with sufficient capacities. These requirements set the bar extremely high for traditional logistics providers and create a competitive situation in which literally every minute and every euro counts.
Key requirements for today's carriers
- Reliability
- Cost efficency
- Seamless parcel tracking
The supply difficulties during the Corona crisis have recently shown how important strategies and measures have become that enable quick and flexible reactions to fluctuating demands on one's own capacities as well as cost-effective service.
However, these challenges also provide opportunity for traditional logistics companies to secure their place in a future market by accurate planning and investments in clever digital solutions.
Reliability and cost efficiency
In 2018, in a study* by the Händlerbund (retail association), 90% of the 513 retailers surveyed stated that their priority when choosing their logistics service provider was reliability.
The reason for this prioritization is that the demand of an online shop is not linear. The order volume and the frequency of parcel pickups vary daily. There are also seasonal peaks, such as the Christmas business. Many e-commerce providers therefore distribute their transport volume among several carriers in order to reduce the risk of delivery bottlenecks when the workload is high and to be able to keep their delivery promises.
Logistics service providers must be able to cope with the demands placed on them such as short delivery times and adherence to deadlines at any time and under any changing parameter in order to meet the expectations of e-commerce. It's not just about speed. Correct execution of an order with the correct items in the correct quantity is just as important.
Returns, partial deliveries and communication efforts caused by incorrect deliveries consume time and cost money. In addition, in the event of a wrong delivery or insufficient deliveries, the customer cannot use the purchased items in the desired time frame, which can lead to the future loss of purchases for the online shops. In order to maintain customer loyalty, logistics must not only work at the desired speed, but also error-free. This is exactly where digital solutions support and ensure smooth logistics processes with high flexibility.
In rapid transit in parcel depots, financial risks and reputation damage arise primarily from missing or misplaced, stolen or damaged parcels and unclear transfers of liability. This is why video solutions such as ParcelVIS from DIVIS monitor every centimeter that a package travels on the sorting belt as a standard measure in many parcel depots.
Even though shipping costs are not the decisive criterion for many e-commerce service providers, they are still one of the central issues in transport. In the case of logistics service providers, the pricing when determining shipping costs is based on their capacity utilisation and, if additional short-term capacities need to be purchased during high capacity utilisation, it cannot be compensated for by additionally acquired packages. This causes fluctuating prices. By passing fluctuating shipping costs on to consumers, e-commerce providers would risk losing customers, because generally customers simply want to pay the lowest possible price for postage. Fair and low-fluctuation shipping costs are therefore definitely relevant for online retailers when choosing their carrier.
Logistics is therefore facing a constant conflict between the need for steadily increasing logistics quality at minimised costs.
In rapid transit in parcel depots, financial risks and reputation damage arise primarily from missing or misplaced, stolen or damaged parcels and unclear transfers of liability. This is why video solutions such as ParcelVIS from DIVIS monitor every centimeter that a parcel travels on the sorting belt as a standard measure in many parcel depots. In this way, the entire movement sequence of a package through the transshipment depot can be followed on the predefined routes and any deviations, errors and irregularities that occur can be reacted to quickly. Missing or incorrectly placed shipments can be found again within a very short time period and without the need for a lot of staff. Damage and transfers of liability are clearly documented. Other requirements, such as conformity with the GDPR, are also automatically taken into account. The focus is on the tracking of the parcels, while the integrity of the data of your employees can be guaranteed at all times through tools such as pixelation etc.
In many facilities, the investment in a video system pays for itself after a short time in the form of higher reputation through improved service quality and cost savings at various critical points in the flow of goods.
Parcel tracking
Nowadays, parcel tracking from dispatch to delivery is expected by online buyers. Tracking is correspondingly widespread on the road.
With the handover of the parcels by the online retailer to their shipping service provider, the remaining contact points with the end customer are also handed over to the logisticians, who in turn have to provide the appropriate track & trace options.
To track the parcel, a barcode is scanned at different nodes during the delivery process, which means that the package as well as its position, time and date can be clearly assigned.
For logisticians, [tracking in the depot or warehouse] offers extremely valuable information on a package, especially when it comes to cost-relevant questions, such as the cause or time of damage or liability in the event of a parcel being lost.
Seamless tracking also offers advantages in the depot
Tracking in the depot is less interesting for the consumer. For logisticians, however, it offers extremely valuable information about a package, especially when it comes to cost-relevant questions, such as the cause or time of damage or liability in the event of a parcel being lost.
In ParcelVIS, sorting and scanning information of a parcel is linked with the associated video data when it is being scanned.
This creates a continuous movement path for each package within the depot and enables it to be tracked without gaps. The ParcelVIS software is therefore a valuable component in the seamless 24h real-time parcel monitoring and makes an important contribution to complete transparency along the entire supply chain.
Our CargoVIS software can also be used in the same way in the handling of goods in transshipment, because here, too, transparency brings decisive time and cost advantages.
More information on this topic
The following article is also part of our reports on the effects of the corona crisis on logistics:
LOGISTICS IN TIMES OF THE THE CORONA CRISIS
Corona pandemic promotes digitisation among transport service providers
Our Software Solutions
Find palletised shipments quickly with CargoVIS
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ParcelVIS for cross docking & CEP providers
Save time and money and let ParcelVIS work effectively for you with image-based consignment investigation in the transshipment warehouse: Entering the parcel label number is your key to all information on the whereabouts and status of a consignment during all scanned events.
